SecProbe.io

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February 11, 2005
VIA U.S. MAIL AND FACSIMILE

Robert W. Wright
CEO
PRB Gas Transportation, Inc.
1401 17th Street, Suite 650
Denver, CO  80202

		Re:	PRB Gas Transportation, Inc.
			Registration Statement on Form S-1/A
			File No. 333-120129
			Filed January 28, 2005

Dear Mr. Wright:

      We have reviewed your filing and have the following
comments.
Where indicated, we think you should revise your document in
response
to these comments.  If you disagree, we will consider your
explanation as to why our comment is inapplicable or a revision is
unnecessary.  Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
supplemental information so we may better understand your
disclosure.
After reviewing this information, we may or may not raise
additional
comments.

      Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects.  We welcome
any questions you may have about our comments or on any other
aspect
of our review.  Feel free to call us at the telephone numbers
listed
at the end of this letter.

Form S-1/A

General
1. We note your response to prior comment 1.  Please note that
section 3(a)(9) of the Securities Act is not available for the
exercise of warrants because the exercise involves the payment of
consideration.
2. Please update the financial information included in your filing
in
accordance with the requirements of Rule 3-12 of Regulation S-X.

Prospectus Summary, page 1

3. You now indicate that the use of the proceeds is to retire bank
indebtedness and for working capital and general corporate
purposes.
Please include additional disclosure indicating that the bank
indebtedness arose from the Bear Paw acquisition.

Our Series A and Series B preferred stockholders . . . , page 8

4. Please delete the mitigating language that appears in the first
sentence of this risk factor.

Use of Proceeds, page 10

5. We note your response to prior comment 10.  For each purpose
you
have identified, disclose an approximate dollar amount of the net
proceeds you will allocate to that purpose.

6. Disclose the specific date of maturity related to the line of
credit.  See instruction 4 to Item 504 of Regulation S-K.

Capitalization, page 11

7. You assume that the proceeds of the offering will be used to
repay
the $1.5 million line of credit.  The terms of the line of credit
require payment by March 2005.  If you are unable to complete the
offering by March 2005, please revise your filing to indicate the
source(s) of liquidity for the $1.5 million payment and the
potential
ramifications to you if the payment is not made timely.

Subsequent events, page 28

8. We note your response to prior comment 18.  You indicate that
you
conducted a private placement during September through December
2004
that commenced before the filing of this registration statement
and
continued concurrent with this registration statement.  As
previously
indicated, we deem the filing of a registration statement to be a
general solicitation.  It appears that you have engaged in a
general
solicitation not compatible with a private placement under Rule
506
of Regulation D or Section 4(2) of the Securities Act.

You have provided your analysis under the five-factor test as to
why
the private placement should not be integrated with the offering
contemplated by the registration statement.  However, we note that
(1) one of the stated purposes of the private placement was to
repay
the Bear Paw promissory note and that the registration statement
filed on November 1, 2004 indicated that you intended to use the
proceeds from the initial public offering for the same purpose,
(2)
the offers took place at or about the same time, (3) you received
the
same consideration, and (4) you issued securities immediately
convertible into common stock, the security being registered on
this
registration statement.
Please expand your analysis as to why you believe that this
private
placement complies with Section 5 of the Securities Act.  In the
alternative, consider including risk factor disclosure regarding
the
amount of the potential rescission liability that you may have
with
respect to the Series C Convertible Stock and consider whether any
contingent liability for damages must be reflected in the
financial
statements.

Business, page 30

9. We note your response to prior comment 21.  Please file the
material gas gathering and transportation agreements, or provide
an
argument based on Item 601(b)(10) of Regulation S-K as to why you
should not be required to file these agreements.  While we
understand
your concern that disclosure of certain terms would be detrimental
to
your business, the confidential treatment request procedure is
available if your contracts contain sensitive data.

Stock Ownership of Management and Principal Stockholders, page 46

10. Please disclose the amount of securities that each of the
holders
identified in this section will sell under the selling stockholder
prospectus that forms a part of this registration statement.

Certain Relationships and Related Transactions, page 47

11. Please revise the title of this section to read "Certain
Relationships and Related Transactions" as Item 404 classifies
this
information.

12. We note your response to prior comment 27.  Please discuss the
loan you received from a related party to acquire Mr. Norris`
securities, or expand your argument to indicate that this
preferred
stockholder has not at any time held or had control over more than
five percent of your common stock on an as-converted basis or your
preferred stock.  If additional disclosure is required, include
the
name of the lender, the terms of the loan and the relationship of
the
lender to you.  Please also include information about the lender`s
preferred holdings.

Description of Securities, page 48

13. It appears that Mr. Wright issued Series A investors options
to
acquire some of his holdings.  Please indicate what exemption from
registration Mr. Wright relied upon for this offering.

Financial Statements
PRB Gas Transportation June 30, 2004 (audited) and September 30,
2004
(unaudited)

Statement of Changes in Stockholders` Equity, page F-5

14. We note your response to prior comment 42.  Help us better
understand how you determined that the issuance of the Series C
Convertible Preferred Stock at a rate per share materially lower
than
the IPO price did not result in a compensation charge given that
it
appears that a substantial portion of the sales were to officers
and
related parties.  You indicate that certain provisions of the
Series
C Convertible Preferred Stock (e.g., lock-up provisions) serve to
reduce the value of the shares.  It is not clear to us how you
assessed the relative value of such provisions in determining that
no
compensation charge was necessary.  Please reconcile and explain,
in
greater detail, the difference between the sale price and the IPO
price.

Note 8.  Stockholders` Equity

Equity Compensation Plan, page F-16

15. We note your response to comment 46 and your reference to
Kaneb
Services LLC as support for utilizing an expected volatility of 5%
to
calculate pro forma stock compensation expense disclosure and
valuation of warrants issued to consultants.  Several companies in
the gas transmission industry (SIC 4922) use an expected
volatility
of between 20% and 50%.  Other companies in the industry (SIC
5172),
upon which you have patterned your volatility assumptions, use
expected volatilities of at least 20%.  In light of this,
supplementally tell us why you believe it is reasonable to use a
volatility figure that is much lower than that of your peers.
Please
provide detailed support in your response. If you do not have any
detailed support for your assumption, please revise your filing to
reflect a volatility figure consistent with the guidance in
paragraph
285(b) and Appendix F of SFAS 123 and provide us with the
calculations supporting your revised disclosure. Please note that
we
object to management`s identification of a single peer company in
light of the fact that there are numerous similar filers with whom
you could be compared and all of those filers appear to have
materially higher volatility than the entity with which you
compare
yourself.

PRB Gas Transportation, Inc.

Subsequent Events, page F-20

16. You indicate that a preferred shareholder ("Pledgor") pledged
a
certificate of deposit in the amount of $1 million for the bank
line
of credit.  Please indicate the identity of the pledgor in the
certain relationships and related transactions section and include
risk factor disclosure about the potential ramifications of a
default
on your structure.

Certain Gas Gathering Assets of Bear Paw Energy, LLC

Statements of Revenues and Direct Operating Expenses, page F-37
17. In a footnote, please describe the nature of "Other operating
expenses."
18. In a footnote, please disclose the allocation methodology used
to
arrive at depreciation and impairment amounts for all periods
presented.
19. Please revise your discussion of the purchase price allocation
to
indicate that you have not determined the value of the asset
retirement obligation (ARO) to be assumed as referenced on page F-
8
and F-44.  Revise the discussion on pages F-8, F-37 and F-44 to
provide the reader with the context to understand the extent to
which
you believe that recognition of the ARO will result in a material
change in the assets acquired and liabilities assumed and the
level
of expenses to be recognized in future periods. If you know at
least
a preliminary range of the value of the ARO, please disclose.
Also,
you should revise the title of the Statement of Assets Acquired to
reflect the fact that you have assumed certain liabilities,
notwithstanding the fact that you have not yet allocated a fair
value
to those liabilities.  Please include a line item on the revised
Statement of Assets Acquired and Liabilities Assumed titled "Asset
Retirement Obligation" and include a cross reference to the
revised
note where you discuss that the fair value of such liability has
not
yet been determined.

Unaudited Pro forma Combined Statements of Operations

20. As the Certain Gas Assets of Bear Paw Energy LLC and TOP
Gathering LLC were formerly tax exempt entities, please revise
your
disclosures to present pro forma EPS and tax data based on PRB Gas
Transportation`s current tax status.  The pro forma information
may
be presented here, or, preferably, on the face of PRB Gas
Transportation`s historical financial statements. If you omit an
income tax expense line item because you expect that you would be
able to offset any tax due through absorption of net operating
loss
(NOL) carryforwards, please provide a note to the pro forma
financial
statements to explain and provide context for a reader to
understand
the extent to which application of NOL carryforwards could be used
to
offset future taxable income.
21. Supplementally tell us in greater detail how you factually
support the estimate of incremental general and administrative
expenses for corporate office overhead functions not previously
required.  Unless your estimate is based on firm contractual
employment agreements, purchase orders, etc. for all costs
included
in your assumptions we believe such disclosure would more
appropriately be reflected as forward-looking information for the
reader rather than as a pro forma adjustment.  Please advise or
revise.
22. Your issuance of Series C Convertible Preferred Stock at a
rate
per share less than the IPO price appears to result in a nominal
issuance of stock as that term is defined in SAB Topic 4:D.
Please
revise your pro forma earnings per share (EPS) calculation for all
periods presented where net income is positive, if applicable, to
reflect the assumed conversion of the 411,000 shares of Series C
Convertible Preferred Stock consistent with the guidance in SAB
Topic
4:D.
23. Please revise your pro forma financial statements to remove
the
pro forma adjustment related to impairment of certain Bear Paw
historical assets.  Historical infrequent or nonrecurring items
included in the underlying historical financial statements of Bear
Paw may not be eliminated for pro forma purposes since such
transactions are not a direct result of the Bear Paw transaction.

Item 15. Recent Sales..., page II-2

24. In your discussion of the accredited investor standard, please
include the rules for partnerships and trusts as it appears that a
number of partnerships and trusts were involved in the purchase of
your convertible securities.  Additionally, you may wish to
reevaluate whether the partnerships and trusts were accredited
investors under the standards applicable to those entities.

25. In the Series A Convertible Preferred issuance, it appears
that
you issued shares to JMGG Partners.  As the general partner of
JMGG
Partners, it appears that John McGrain may have been a control
person
of you after the issuance of the Series A securities.  If so,
please
identify Mr. McGrain as a former control person of you, and
identify
any transaction he may have conducted with you

26. In the Series A Convertible Preferred issuance, it appears
that
JMGG engaged in a distribution to its limited partners.  Please
provide us with the written materials and subscription agreement
for
the initial placement and any subsequent placements.  Similarly,
please provide subscription agreements for each of the private
placements you have conducted.  Additionally, indicate what
exemption
from registration was relied upon for the transaction, and tell us
whether JMGG acted as an underwriter.

27. It also appears that at least one distribution in ongoing in
the
Series B Convertible Preferred.  Please indicate whether the LGS
registered or used an exemption for the put right offered to share
recipients.  It also appears that the shares distributed by LGS
have
not settled since the recipients have the right to put the
securities
back to LGS.  Please provide your analysis of how the placement is
completed. Also, please tell us how many of the 63 investors in
the
Series B Convertible Preferred offering were accredited investors.

28. Please tell us how the partnership distributions comply with
your
obligation under Rule 502(d)(1) of Regulation D.

29. It appears that all of the private placements made since
January
2004 should be integrated with each other.  Please tell us under
Rule
502(a) of Regulation D why you believe that the placements made by
you should not be integrated considering the proximity in time,
similar structure and similar purpose.

30. Please identify by name the members of Resch Polster Alpert &
Berger who received warrants.

Exhibit 5.1

31. We note that counsel`s legal opinion relates solely to the
2,300,000 securities to be issued in the underwritten offering.
Please request that counsel file a legal opinion that also relates
to
the securities that are being registered for resale.

Consent of Independent Registered Public Accounting Firm

32. Please correct the name of TOP Gathering and its audit report
date in your updated consent.

      As appropriate, please amend your registration statement in
response to these comments.  You may wish to provide us with
marked
copies of the amendment to expedite our review.  Please furnish a
cover letter with your amendment that keys your responses to our
comments and provides any requested supplemental information.
Detailed cover letters greatly facilitate our review.  Please
understand that we may have additional comments after reviewing
your
amendment and responses to our comments.

      You may contact TaTanisha Henderson at (202) 942-2958 or
George
Ohsiek, Accounting Branch Chief, at (202) 942-2905 if you have
question