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UTAH OIL TRAIN

Proposal chugs along amid environmental concerns

By Sam Metz

The Associated Press

DUCHESNE, Utah>> On plateaus overlooking the Uinta Basin’s hills of sandstone and sagebrush, pumpjacks bob their heads as they lift viscous black and yellow oil from the earth that will eventually make everything from fuel to polyester fabric.

To move fossil fuels from the Uinta Basin’s massive reserve to refineries around the country, officials in Utah and oil and gas companies are chugging along with a plan to invest billions to build an 88-mile rail line through national forest and tribal land that could quadruple production.

The Uinta Basin Railway would let producers, currently limited to tanker trucks, ship an additional 350,000 barrels of crude daily on trains up to 2 miles long. Backers say it would buoy the local economy and lessen American dependence on oil imports.

“We still have a huge need for fuel, and we’re not creating more capacity in the Gulf or anywhere in the United States,” said Duchesne County Commissioner Greg Miles, who helps lead a seven-county board spearheading the project.

The rail link has the support of the local Ute Indian Tribe of the Uintah & Ouray Reservation and Utah lawmakers. The state has allocated more than $28 million to help launch the proposal and clear early permitting hurdles.

It has won key approvals from the federal Surface Transportation Board and U.S. Forest Service.

But much like Alaska’s Willow oil project, its progression through the permitting process could complicate President Joe Biden’s standing among environmentally minded voters. As the president addressed heat and climate change on a trip to Utah, Arizona and New Mexico this week, they say the country cannot afford to double down on fossil fuels.

“They’re not following their own policies,” said Deeda Seed of the Center for Biological Diversity, one of several groups that has sued over the project. “The world’s on fire. The Biden administration says they want to stop the harm. So far they’re enabling a project that makes the fire even bigger.”

The year ahead likely will be critical for the railroad as it seeks additional approvals from the Forest Service, Department of Transportation and Bureau of Indian Affairs. Completion could be years away and will require fending off fiscal, environmental and safety concerns.

Since an Ohio freight train’s fiery derailment in February forced thousands to evacuate from the threat of hazardous chemicals, the specter of similar catastrophes has sown fear in neighboring Colorado, where Uinta Basin trains eventually would pass to reach refining hubs near the Gulf of Mexico. Worried about oil trains traversing their narrow canyons, Eagle County has joined environmentalists in suing over the preliminary federal approvals, and the state’s congressional delegation has pushed the Biden administration to stop the project.

“These trains would run directly alongside the headwaters of the Colorado River — a vital water supply,” U.S. Sen. Michael Bennet and U.S. Rep. Joe Neguse wrote in a letter last month about the route the trains would take when the new track connects to broader rail lines. “An oil spill in the Colorado River headwaters would be catastrophic.”

Most of the crude produced in the Uinta Basin currently makes its way to refineries via heated tanker trucks that traverse mountains on a two-lane highway. Transportation costs force producers mainly to sell their barrels to the five Salt Lake City-area refineries for significantly less than they could get in bigger markets in Gulf states such as Texas, Louisiana and Mississippi.

The railroad would start in the northern end of the Uinta Basin and run south to connect producers in Utah’s Duchesne and Uintah counties — combined population 55,000 — to the broader railroad network.

“We’re in a high basin. We’re surrounded by mountains, and trucking has its risks and costs. It’s a lot more labor-intensive, and you can’t realistically truck a large amount of oil — 50,000 or 100,000 barrels a day — all the way to east Texas,” Reed Page, director of gas marketing operations for Summit Energy, said at a meeting this month of the state’s oil and mining department. “But you can do that economically by rail.”

Producers also argue it eventually will allow them to develop oil shale and tar sands oil that are currently too costly to pursue.

Environmentalists have decried the potential impact of both, arguing they are more energy-intensive and dirtier than traditional crude.

The proposal has won key federal agency approvals, including from the Surface Transportation Board. The U.S. Forest Service granted a 12-mile right of way through the Ashley National Forest, where three of the project’s five tunnels would be dug into mountainsides.

One of those tunnels would be near where Darrell Fordham, founder of the Argyle Wilderness Preservation Alliance, owns a family cabin. Fordham is concerned about oil spills, but he also is unhappy that public money has gone to support the project.

“This is our land, but the very same thing or something very similar could happen to anyone. We think that, because we own land, we have certain rights, but they want to run this railroad right over the top of us with no consideration for us whatsoever,” Fordham said.

Neither the Forest Service nor the Department of Transportation responded to questions from The Associated Press about the proposed railway. In their approvals, they said the project complies with federal laws to protect the environment as well as Biden executive orders on tribal consultation and environmental justice.

The Ute Indian Tribe of the Uintah & Ouray Reservation also did not respond to questions. Although tribes throughout the United States have become some of the most vocal opponents of fossil fuels, the tribe’s business committee chairman said in a statement last year that the “economic well-being of our membership depends on energy mineral production on our reservation.”

Financing for the project is being spearheaded by the Seven County Infrastructure Coalition, a body formed by eastern Utah officials. They used state grants throughout the permitting process and want the Department of Transportation to approve an application to issue $2 billion in tax-free bonds to fund the project. The infrastructure bill that Biden signed in 2021 doubled the Department’s ability to approve private activity bonds to $30 billion; the railroad would be the largest project they’ve approved to date.

Supporters say investors will save substantially if developers can finance the project with tax-exempt bonds rather than traditional debt, which is taxed by state and federal authorities like other income.

Supporters and opponents acknowledged that the rail line is years away even if financing is assured and all permits are obtained.

“Once this rail is built, it will be there for 100 or 200 years. Whether or not oil will still be the major commodity in the basin, no one has a crystal ball. But that rail will still be there and can be utilized to ship whatever is needed,” said Keith Heaton, the Seven County Infrastructure Coalition’s executive director.