Why don't they also look into electrification of some of their rail lines?

Too expensive, probably, and they'd have to replace their locomotives.

Eric,
There is also the issue of heavy snow, wind and ice. However, if diesel becomes expensive enough, it might make sense to electrify.

Montana Governor Brian Schweitzer was on 60 Minutes a while back promoting CFL. He wanted to sequester the CO2 by using it to get more oil out of old wells. He did not say how they would be the CO2 to the wells. Presumably they would build pipelines.

I would bet that Montana does not care for electric locomotives due to:
1) Montana has significant coal deposits
2) The vast openness of its land makes electricity infrastructure very expensive. Electricity works better around existing infrastructure, not in vast expanses of rural boonieland.

1.4 billion gallons is a lot of deisel. For electric, that's a lot of windmills/PV panels/coal electricity (the likely supply) and no way to get that energy to the trains. So they figure, let's just turn the coal into fuel and skip the middleman (the power company), avoid replacing trains, and avoid building new power line infrastructure.

(not saying I like it, but that's what they are facing).

Yes, and Russia has just completed the elecrification of the trans-Siberian. An extremely long line, mainly through sparsely populated regions.

I agree with general comments on rail. I would love to see large-scale electrification of freight rail here in Australia and in North America. However, I think Cervus's comments are relevant. This sort of infrastructure development doesn't rate highly as a public policy priority and sometimes the payback is fairly small.
The other factor is the funding imbalance between road and rail. Road funding is where the big dollars go.The road lobby is well-organised, vocal and can marshal a lot of public support. It has a couple of big trump cards in improving safety and lessening congestion that usually seem to work. Most industries favour road over rail because of its flexibility and convenience.
In my part of the world we are flat out getting enough funding just to keep the tracks in reasonable condition let alone looking at electrification.
Global freight volumes are projected to increase rapidly over the next 20 years. My hope is that government and the public realise the safety implications of large numbers of heavy freight vehicles mixing with passenger vehicles on the roads and that this forces a push towards rail freight. There is a lot of work to do to make rail freight competitive with road but the pay-off is that rail freight transport is about five times more efficient than road. Feel free to correct me if I'm wrong on that figure.

WRT electrified rail...something like the Green Goat, maybe several with catenaries on the uphill, would be a start. And DC motors/batteries for dynamic brakes.

I think there may be more opportunity with rail electrification than meets the eye. One problem with wind energy is that many high wind locations are far from populated areas and power lines, making them difficult resources to tap. If the railroads used their land holdings to transmit electricity as well as goods, they might be able to make the rail electrification more profitable than it would first appear. This might make national high speed rail possible as well.

Howdy, Being from Montana (and the county producing the most coal being dug from the ground) seeing all those millions of tons go by on the coal trains i appreciate how much energy goes into the movement of energy.
In moving electricity from point A. (Colstrip Montana) to point B. (1000 miles to the east)there is going to be a very significant amount of line loss, (the loss of energy due to the resistance of the conductor). So the idea of electrifying the trains does not present a more efficient way to deliver the product (electricity) to Detroit. If it were efficent to move the electricity from Montana to Michigan to power locomotives then it would be unnecessary to move the coal at all. There would be more powerplants built here rather than to moving the coal to where the energy is needed.
Another part of the advantage of using the railroad to haul energy to the Midwest is that it is downhill. Very little coal is moved across the Continental Divide because it is so much more expensive to haul it uphill. Electric railroads are not going to happen here, in spite of how well they work anywhere else, until after we start using methane to produce energy rather than allowing it to cause 30 times more harm to the atmosphere than the CO2 that everyone is yammering about.
If you want to actually do something to really cut down on global warming then light your farts (and those of your friends) for by burning the methane you will reduce it to CO, CO2 and steam. And the world will smell sweeter besides.