Bonds

Fight for Utah oil railway moves to national stage

Public-sector backers of a proposed bond-financed crude oil-transporting railway in Utah are turning to the U.S. Supreme Court and Congress in an effort to get the project back on track.

The Seven County Infrastructure Coalition plans to seek the high court’s review of an August U.S. Appeals Court ruling that derailed the Uinta Basin Railway.

Coalition Executive Director Keith Heaton told Utah’s Infrastructure and General Government Appropriations Subcommittee last week the ruling from the “liberal” Washington, D.C.-based appellate court, which led to the withdrawal of federal permits for the project, would require environmental assessments for any destination where oil or any other product is shipped to by the railway.

Utah’s Seven County Infrastructure Coalition has set its sights on a U.S. Supreme Court review of an August federal appeals court ruling that found the U.S. Surface Transportation Board erred in approving an environment impact statement and biological opinion for the Uinta Basin Railway in 2021.

Bloomberg News

“We’re soliciting Supreme Court certiorari because this treads all over state’s rights, interstate commerce,” he said. “It would put an end to pretty much any energy or interstate transportation project of energy materials.” 

The federal appeals court found the U.S. Surface Transportation Board erred in approving an environment impact statement and biological opinion for the project in 2021.

Ted Zukoski, senior attorney at the Center for Biological Diversity, which along with Colorado’s Eagle County challenged the federal board’s approval in court, said the coalition has until early March to file a petition with the Supreme Court.

“The D.C. Circuit decision was a unanimous one by the three-judge panel, which found ‘significant’ and ‘numerous’ violations of law,” he said in an email. “It’s unfortunate that the train’s backers are now hoping to take money from taxpayers to subsidize this oil industry gambit before the Supreme Court.”

Heaton appeared before the Utah legislative subcommittee to request a one-time $750,000 state appropriation to keep the coalition operating as it fights for the railway. 

The coalition launched a public-private partnership for the railway in 2019 with Drexel Hamilton Infrastructure Partners, the owner of the Uinta Basin Railway limited liability company, which plans to seek up to $2 billion in private-activity bond authorization from the U.S. Department of Transportation for the project.

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 refineries.

Heaton said the coalition also enlisted the help of Utah’s Congressional delegation.

Bill amendments offered by Utah Republicans in the U.S. House and Senate declared the railway’s “timely completion of construction and operation” is required in the national interest.

The amendments have Congress approving “all authorizations, permits, verifications, extensions, biological opinions, incidental take statements, and any other approvals or orders issued pursuant to federal law necessary for the construction and initial operation at full capacity of the Uinta Basin Railway.”

If judicial and legislative efforts fail, Heaton said, the coalition could redo the environmental impact statement.

Environmental groups and members of Congress from Colorado have raised concerns over the railway’s potential harm to the Colorado River’s headwaters, particularly in the wake of high–profile, toxic train derailments in other parts of the nation. 

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