Controversial Utah rail project to reseek key permit voided by court

A proposed crude oil-transporting Utah railway project, which would be financed mostly with private-activity bonds, will head back to a federal agency after a key permit was rejected by a U.S. Appeals Court.

A three-justice District of Columbia-based panel ruled last week that the U.S. Surface Transportation Board erred in approving an environmental impact statement (EIS) and biological opinion for the Uinta Basin Railway in 2021.

“The board’s discussion of the environmental policies in the final exemption order separately demonstrate that the board did not adequately consider the incredibly significant environmental effects identified in the EIS in weighing those impacts against the uncertain transportation benefits of the railway,” the court’s opinion stated.

The railway, which plans to seek up to $2 billion in private-activity bond authorization from the U.S. Department of Transportation, said it remains committed to the project’s planning and construction.

“We firmly believe that the railway’s environmental impact statement contains appropriate and thorough analysis of the highlighted concerns, as it stands today,” the railway said in a statement. “Nonetheless, we are ready, willing, and capable of working with the U.S. Surface Transportation Board to ensure additional reviews and the project’s next steps proceed without further delay.”

The 86-mile rail line would extend from two terminus points in the Uinta Basin to connect with an existing Union Pacific line, providing a cheaper alternative to trucking for shipping waxy crude oil produced in the basin to Gulf Coast and other refineries.

Utah’s Seven County Infrastructure Coalition launched a public-private partnership for the railway in 2019 with Drexel Hamilton Infrastructure Partners, which owns the Uinta Basin Railway limited liability company. Utah Permanent Community Impact Fund grants totaling $27.9 million funded coalition planning and studies.

The lawsuit filed against the federal agency by Colorado’s Eagle County last year was supported by environmental groups, which hailed the ruling.

“This is an enormous victory for our shared climate, the Colorado River and the communities that rely on it for clean water, abundant fish and recreation,” Deeda Seed, a senior campaigner at the Center for Biological Diversity, said in a statement. “The Uinta Basin Railway is a dangerous, polluting boondoggle that threatens people, wildlife and our hope for a livable planet.”

Colorado U.S. Sen. Michael Bennet and U.S. Rep. Joe Neguse called the ruling “excellent news.”

“A new review must account for all harmful effects of this project on our state, including potential oil spills along the Colorado River and increased wildfire risk,” they said in a statement.  “An oil train derailment in the headwaters of the Colorado River would be catastrophic — not only to Colorado, but the 40 million Americans who rely on it.”