Utah crude trains could be rolling through Colorado after Forest Service denies objections to new rail line

The Uinta Basin Railroad would connect northeast Utah oil fields with the national rail network to transport 5 billion gallons of crude a year to Gulf Coast refineries

Jason Blevins
The Colorado Sun
The Union Pacific Railroad runs along the Colorado River near Kremmling. Grand County Commissioners sent U.S. Senators Michael Bennet and John Hickenlooper, Rep. Joe Neguse and Governor Jared Polis a letter declaring their formal opposition to the Uinta Basin Railway unless safety considerations were met.
Jason Blevins/The Colorado Sun

It’s looking likely that heated train cars loaded with a waxy crude oil will be rolling through Colorado after the Forest Service last week rejected objections to the proposed new rail line in a section of roadless forest in Utah.

“We are going to continue to fight this terrible project with every tool available to us,” said Deeda Seed with the Center for Biological Diversity, which has spent years battling to stop the proposed Uinta Basin Railway, an 85-mile stretch of new railroad that would connect the oil fields of northeast Utah with the national rail network.

A consortium of environmental groups earlier this year filed objections to the Forest Service’s draft plan to allow the new railroad to traverse about 12 miles of roadless area, with new bridges and tunnels in the Ashley National Forest. Last week, the agency dismissed those objections, ruling that the yearslong Environmental Impact Statement conducted by the federal Surface Transportation Board, which approved the new railroad in December 2020, adequately addressed environmental concerns.

“In our view, the totality and essence of the reasonably foreseeable environmental effects were fully and clearly disclosed” in the environmental review, Deborah Oakeson, the Forest Service’s deputy regional forester, wrote on July 5 to attorneys representing the environmental groups.

That was a final regulatory hurdle for the railroad’s backers. Houston-based Drexel Hamilton Infrastructure Partners and railroad operator Rio Grande Pacific Corp. plan to build the $1.5 billion railroad for Utah’s Seven County Infrastructure Coalition, which has spent years studying how to move the viscous, waxy crude oil from Uinta Basin to refineries on the Gulf Coast. The plan could move as much as 350,000 barrels a day — up to 5 billion gallons a year — in train cars that need to be heated to keep the crude from solidifying. The crude is too thick to push through a pipeline and production has been limited by rules limiting numbers of oil trucks.

If the railroad is built, it will connect with Union Pacific Railroad track that runs along the Colorado River from Grand Junction, through Glenwood Springs and Gore Canyon, to Granby and then through the Fraser River Valley through the Moffat Tunnel into Boulder County and Denver.

A 500-year-rain event in July 2021 sent mud and debris across Union Pacific railroad tracks and into the Colorado River in Glenwood Canyon along Interstate 70. (Hugh Carey, The Colorado Sun)
Eagle County earlier this year joined several environmental groups in an appeal of the Surface Transportation Board’s approval of the Uinta Basin Railroad. That appeal, filed in the U.S. Court of Appeals in Washington, D.C., argues the board failed to look at indirect impacts of the oil train traffic on the Colorado River and communities along the river corridor.

Rio Grande Pacific Corp., which is contracted to operate the railroad, in 2020 asked the Surface Transportation Board for expedited review of a plan to open the long-dormant Tennessee Pass Line, which runs from Dotsero to Cañon City. Many communities and environmental groups along that line strongly objected to the idea of train traffic on the mountainous railroad that winds along the Arkansas River from Leadville to Pueblo. Rio Grande Pacific Corp.’s newly formed Colorado Midland & Pacific Railway Co. promised it would not ship oil on the tracks and would only move passengers and non-hazardous commodities on the railroad that closed in 1997 after a history of derailments. The surface board in March 2021 denied the expedited approval, forcing Rio Grande Pacific to pursue lengthy environmental review if it wanted to revive train traffic over Tennessee Pass.

Tennessee Pass Line and surrounding rail lines. (Surface Transportation Board filing)

‘Bold actions to restore forests’

Two weeks ago the head of the U.S. Department of Agriculture and the chief of the U.S. Forest Service issued a memo that said the agency would be taking “bold actions to restore forests, improve resilience and address the climate crisis.”

The new Forest Service push for “immediate and near-term actions to build carbon stewardship and climate resilience” in national forests was in response to President Joe Biden’s executive order to strengthen national forests with wildfire mitigation, ecosystem restoration and reforestation.

“But here’s the agency that absolutely has the discretion to stop a project that will contribute significantly to the climate crisis, but they choose to do nothing and literally throw gasoline on the fire that is the climate crisis. The alarm bells are ringing,” said Seed, whose group last year sued in Utah state court to block the railroad project arguing the railroad project illegally used funds from the state’s mineral leasing account to permit the new railroad when those funds were meant to mitigate the impacts of mineral extraction.

Mark Michel, the co-founder and managing partner Drexel Hamilton Infrastructure Partners, said there is “an insatiable need and desire by not just energy consumers here in the U.S. but across the globe for a stable supply and increased reliability of … energy opportunities.”

Utah is “extraordinarily blessed to have the geological fortitude” to have access to this type of crude, Michel told the Seven County Infrastructure Coalition during a hearing in Utah’s statehouse on Friday.

Michel said his team has found increased demand for this waxy crude from oil refineries eager to produce domestic energy as well as demand from makers of cosmetics, lubricants and plastics.

“The market has responded and I think, frankly, it’s been a wonderful opportunity as an American developer to bring this product to market to satisfy the security need of our allies throughout Europe as well as Asia as well as providing for the energy needs of Americans,” Michel told the coalition, describing the railroad “as a very important project for the national security of this country.”

A passenger train in November 2021 passes through Gore Canyon along the Colorado River. A proposed new railroad in Utah could direct heated oil trains on the same tracks through the remote canyon. (Jason Blevins, Colorado Sun)
Keith Heaton, the executive director of the coalition, said “we would do much good with these products if we can just get them to the market.”

“The world will be a better place both environmentally and economically with these products,” Heaton said.

Coalition board member Jack Lytle, a commissioner from Utah’s Daggett County, one of seven counties working to build the railroad, said the coalition’s multi-year work on the railroad is “a tremendous model for the state and other commissions on how things can get done.”

“This can be duplicated,” Lytle said.

Opponents of the rail line estimate the production and use of the Uinta Basin crude could increase greenhouse emissions in the U.S. by 1%. And then there are concerns with rolling heated oil along more than 200 miles of the Colorado River through Colorado.

“Approving this is the opposite of bold action,” said Ted Zukoski, an attorney with the Center for Biological Diversity who organized the lawsuit filed in the U.S. Court of Appeals. “It’s just flabbergasting. The priorities of our government are not about combating the climate crisis. They are about knuckling under to the power of the oil and gas industry. There is a disconnect here between the rhetoric and the action of this administration.”

Environmental groups could file a lawsuit objecting to the Forest Service’s final approval of the railroad through the Ashley National Forest. And then there are the lawsuits in Washington and Utah, which could stop or slow the project. But perhaps the best hope for environmental groups is with the market, where investors could be wary of long-term plays in fossil fuels.

“This is an expensive thing to build,” said Seed, who called the initial projected construction cost of $1.5 billion “a significant underestimate” in light of recent economic shifts. “Where is that money going to come from? There is a real concern that they will start building this and not finish it. Or it gets built and then doesn’t get used.”

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