STB OKs Uinta Basin Railway Project

Written by Marybeth Luczak, Executive Editor
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The Surface Transportation Board (STB) on Dec. 15 approved the construction and operation of the Uinta Basin Railway in Utah; STB Chairman Martin Oberman was the sole dissenter.

Approval is subject to the STB Office of Environmental Analysis’ (OEA) final recommended environmental mitigation measures, with minor changes.

In August, OEA issued a Final Environmental Impact Statement (EIS) for the project, identifying the 88-mile Whitmore Park Alternative as the environmentally preferred route, one of three analyzed. It would extend from two terminus points in northeastern Utah’s Uinta Basin near Myton and Leland Bench to a connection with the existing Union Pacific Provo Subdivision near Kyune (see map below). The route includes five tunnels, totaling 5.7 miles. The estimated construction cost is approximately $1.35 billion.

“Depending on future market conditions, between approximately 3.68 and 10.52 trains could move on the proposed rail line per day, on average, including both loaded and unloaded trains,” according to the Final EIS. These trains are expected to “primarily transport crude oil produced in the Basin, but could also carry frac sand, other proppant material, steel, machinery, or mineral and agricultural products and commodities into and out of the Basin.”

Behind the project is the state of Utah’s Seven County Infrastructure Coalition. On May 29, 2020, it sought STB authority to build and operate the Utah line, which it said would provide Basin shippers a viable alternative to trucking—currently the only available transportation option. STB on Jan. 5, 2021 preliminarily approved the proposal, subject to completion of environmental review, on its transportation merits.

In its final approval decision issued Dec. 15, 2021, STB wrote: “The Board recognizes that, as with most other rail construction projects, the construction and operation of this Line is likely to produce unavoidable environmental impacts. But the Board also finds that the construction and operation of the Environmentally Preferred Whitmore Park Alternative, with the extensive mitigation conditions imposed, will minimize those impacts to the extent practicable.”

The project, the agency said, must follow OEA’s final environmental mitigation measures—including voluntary measures proposed by the Coalition and additional measures developed by OEA—with minor changes. The voluntary mitigation measures span from construction and rail operations safety and grade crossing safety to hazardous materials handling and spills during construction; hazardous materials transport and emergency response; air quality; water measures; and community outreach. The additional mitigation measures cover vehicle safety and delay, socioeconomics, and environmental justice, among others. (See Appendix B of the Dec. 15 decision—download below—for mitigation details.)

The construction and operation of line, STB continued, “will have substantial transportation and economic benefits. … [T]he Line will bring rail service to an area of Utah that does not currently have service, provide shippers that must now rely on trucks another shipping option, and create jobs. … Rail service will eliminate longstanding transportation constraints. The availability of a more cost-effective rail transportation option could also support the diversification of local economies in the Basin, which could support additional employment and expand the regional economy. … Moreover, the Board notes the Ute Indian Tribe’s support of the project and the benefits that the Tribe has stated that it will provide. While the No-Action Alternative would avoid the potential environmental impacts of the rail project, it would not bring these benefits to the Basin or meet the goals of the counties making up the Coalition or the Ute Indian Tribe. The environmental impacts identified in the Draft and Final EIS have been sufficiently mitigated so that they do not outweigh the Line’s transportation benefits. Moreover, as explained in the Board’s January 5 Decision …, the Board can grant the Coalition’s request for authority even if all issues involving financing are not yet resolved because the grant of authority is permissive, not mandatory, and the ultimate decision on whether to proceed will be in the hands of the Coalition and the marketplace, not the Board. A grant of authority permits a new line to be built if the necessary financing is obtained. Without moving forward with the process needed to obtain Board authority, however, no new rail lines could be built, regardless of how viable the projects might be.”

The STB summed up that “the transportation merits of the project outweigh the environmental impacts and the Coalition has demonstrated that an exemption from [49 U.S.C.] § 10901 is appropriate. There also is a presumption that rail construction projects are in the public interest. Section 10901(c) provides that the Board ‘shall issue a certificate [authorizing construction activities] […] unless the Board finds that such activities are inconsistent with the public convenience and necessity.’

“Recognizing the presumption, the Board finds that this project should be approved.”

The STB decision is effective on Jan. 14, 2022. Petitions for reconsideration must be filed by Jan. 4, 2022.

Oberman’s Dissent

STB Chairman Martin J. Oberman

STB Chair Oberman disagreed with the STB decision, writing in his dissent that the project’s “environmental impacts outweigh its transportation merits.”

Why? “As an initial matter, as I explained in my dissent to the January 5 Decision, the Board should not have utilized a so-called two-step process and granted preliminary approval of the transportation merits before completion of the environmental review,” Oberman wrote. “In addition, the Board should have required the Coalition to submit additional information before concluding that an application under 49 U.S.C. § 10901 was not necessary. I raised grave concerns then regarding the Line’s financial viability given the increasingly uncertain global market for crude oil, and the likelihood that it would be the public—and not private investors—who would bear the cost of constructing an ultimately unprofitable rail project. These concerns have grown over the last year, as the world economy has accelerated its transition away from use of the internal combustion engine and corresponding need for crude oil. Ever increasing doubt about the future market for oil undermines the project’s transportation merits and counsels against an exemption.

“But now that the environmental review has been completed, I have concluded not only that the financial viability of the Line is in serious doubt but also that the Line’s environmental impacts significantly outweigh its transportation merits. In my view, it should be underscored that the Board has the power to deny construction approval based on weighing all of the environmental impacts that will arise from oil and gas development in the Basin, and the Board should consider those impacts as the reasonably foreseeable, indirect effects that they are, especially since the ‘entire purpose’ of this Line is to stimulate and support oil production in the Basin. Assessing these impacts solely within a cumulative impact analysis, as Today’s [Dec. 15] Decision does, badly understates their significance, and in particular the significance of downstream greenhouse gas emissions that will result from the combustion of oil moved over the Line. The critical question presented in this proceeding is whether the Line would serve the public interest given its centrality to oil development in the Basin and the broader and dire global warming crisis, as well as the very serious, significant, and unavoidable environmental impacts that Today’s Decision does in fact attribute to the project.

“Absent some particularized national need for increased oil from the Basin, of which there is none, I cannot support construction of the Line.”

For more dissent details, download the STB decision here:

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