Environmentalists push lawsuits after impact statement released on $3 billion rail project that would quadruple Uinta Basin’s oil output

The proposed Uinta Basin Railway would send up to 11 trains a day between oil fields and the Union Pacific line in Price Canyon.

( Tribune file photo by Kim Raff) Oil tankers travel US-40 over Utah's Daniels Summit from the oil fields in the Uinta Basin to the refineries in North Salt Lake on May 18, 2012. The proposed Uinta Basin Railway would get some of this truck traffic off the road, by tying the basin with the national rail network.

An oil-hauling railway for the Uinta Basin took a big stride forward Friday with the release of an environmental impact statement (EIS) identifying a preferred route for the 85-mile line that would connect Utah’s oil patch with the national rail network.

The Uinta Basin Railway, proposed by a group of energy-producing Utah counties, would move crude from a load-out near Myton west through Indian Canyon to a connection with the Union Pacific line at Kyune near the top of Price Canyon. Four to 11 100-car trains would travel the route each day, enabling the basin’s oil production to quadruple, increasing daily output to 300,000 barrels according to the EIS.

The controversial project is under review by the federal Surface Transportation Board, which is expected to issue a final decision in the coming weeks that would allow permitting and construction to begin.

The single-track railway would cross stream at 443 places, affecting 61 miles of streams, and could negatively affect 10,000 acres of wildlife habitat. But worse, according to environmentalists, it would promote increased fossil-fuel development at a time when the nation needs to be reducing climate-altering emissions of greenhouse gasses.

The EIS takes only a cursory look at the impacts associated with increased drilling in the Uinta Basin, whose airshed already violates federal standards for ozone, according to the Center for Biological Diversity.

“This document essentially ignores critical environmental issues by making plans to study them later, behind closed doors,” said Wendy Park, a senior attorney with the group. “Utahns are already choking on wildfire smoke, facing historic drought conditions and suffering sweltering heat waves. This colossal waste of public funds advances a filthy oil train that will only make our climate emergency worse.”

Sponsoring the project is the Seven County Infrastructure Coalition, or SCIC, which has entered into agreements with the with Drexel Hamilton Infrastructure Partners to finance the railroad; Rio Grande Pacific Corp. to operate it; and the Ute Indian Tribe, which controls extensive oil and gas holdings, to participate as equity partners.

For years, Uinta Basin’s waxy crude has been plagued by transportation bottlenecks because U.S. Highway 40 is the only avenue to get it to market. Most of it ends up at Salt Lake refineries, which pay a steep discount because producers have nowhere else to send the oil, which hardens as it cools.

A rail connection is hoped to open up new markets, such as the Gulf Coast refineries or the hub at Cushing, Okla., for Uinta crude, but controversy had dogged rail proposals for years, long before the SCIC took it on.

A previous proposal was abandoned because of its projected $3 billion cost, but now proponents say it can be built for far less.

Planning for the railway was covered by grants totaling $28 million from the Utah Community Impact Board, or CIB, which oversees a huge pot of money arising from federal mineral royalties. By law, this money is supposed to be used by communities to address the impact of mineral extraction.

The Center for Biological Diversity and other groups sued the CIB, alleging grants supporting an oil-moving project is an illegal use of this money.

In Utah’s 3rd District Court this week, the plaintiffs argued that SB176, a bill passed by the state Legislature this year, inappropriately aimed to crack open CIB funding for a much wider array of uses than intended by Congress.

“Under [the bill’s] definitions, the CIB would be allowed to fund a study of the most popular celebrities in the U.S., a plan for a car dealership, a land survey for a coal mine, activities necessary to obtain a permit for a food truck, activities necessary to obtain a land use approval for an oil refinery, plus all the engineering, financial analysis and legal analysis related to any of these activities,” Park argued in the hearing.

Echoing criticism leveled by many other groups, Park said that the federal government has designated this money for a much narrower purpose — to “help local communities deal with the impacts of mineral development.” The railway case could set a precedent for other projects benefiting the fossil fuel industry.

“By holding the CIB and the [Seven County Infrastructure Coalition] accountable, the court can send a strong message to these public bodies that funding fossil fuel projects to aid private industry is a misuse of [Mineral Leasing Act] funds,” Park told 3rd District Judge Adam Mow on Wednesday.

Representing the state, attorney Daniel Widdison argued that investing in the railway does align with the Mineral Leasing Act — since the project would reduce the need to move oil by truck to the Salt Lake City oil refineries.

“If this project can get trucks off the road, if it can create a higher viability or sustainability for other industries in the area or, frankly, if it can make extraction of the oil safer, any of those would constitute alleviation of mineral extraction,” he said. “Recognizing … that mineral extraction is an inevitability.”

The plaintiffs are asking the judge to put an end to CIB money going toward the rail project and limit the reach of SB176. Mow took the case under advisement.

Meanwhile, the project enjoys enthusiast support from state officials, who see a rail connection as a way to promote rural economic development in energy-dependent Uintah and Duchesne counties, which comprise the state’s least economically diverse region.

“The rail line will provide future opportunity to transport a wide variety of commodities to world markets,” wrote Redge Johnson, Utah’s public lands policy director, in the state’s official comments. “The railway is a vital infrastructure asset for the economy of the Uinta Basin, which is heavily focused on oil and natural gas development and will be a critical catalyst for new production by creating better access to world markets. The railway will be a vital stimulant to economic opportunity and job creation for the four counties in the basin and the Ute Indian Tribe.”

But environmentalists contend the rail line would make the basin more dependent on fossil fuel extraction, undermining economic diversification and worsening its air quality.

“The project is highly speculative, but the negative impacts that drastically increasing oil extraction in the region would have on air, water, land, wildlife and the climate are clear,” the group wrote in a petition. “This oil train proposal is completely counter to climate science that says we must quickly reduce our use of fossil fuels and transition to renewable energy.”