Utah’s multi-billion dollar oil train proposal flounders amid environmental and derailment concerns

Duchesne, UT • On plateaux overlooking the sandstone and sagebrush hills of the Uinta Basin, pumpjacks cock their heads as they lift from the earth viscous black and yellow oil that eventually becomes everything from fuel to polyester fabric.

To ship fossil fuels from the vast reserves of the Uinta Basin to refineries across the country, Utah officials and oil and gas companies agree to a plan to invest billions in building an 88-mile (142-kilometer) railroad through the National Forest and are investing in tribal land that could quadruple production.

The Uinta Basin Railway would allow producers, currently limited to tankers, to transport an additional 350,000 barrels of crude oil per day on trains up to 2 miles long. Proponents say it would boost local economies and reduce America’s dependence on imported oil.

“We still have tremendous fuel needs and we are not creating additional capacity in the Gulf or anywhere in the United States,” said Duchesne County Commissioner Greg Miles, co-chair of a seven-county panel leading the project.

The rail service is supported by the local Ute Indian tribe of the Uintah & Ouray Reservation and by Utah legislators. The state has committed more than $28 million to get the proposal moving and overcome hurdles to early approval.

It has received important permits from the Federal Surface Transportation Board and the US Forest Service. But similar to the Willow oil project in Alaska, his progress in the permitting process could complicate President Joe Biden’s standing among green voters. As the president discusses heat and climate change on a trip to Utah, Arizona and New Mexico this week, they say the country cannot afford to double its use of fossil fuels.

“They don’t follow their own guidelines,” said Deeda Seed of the Center for Biological Diversity, one of several groups that have sued over the project. “The world is on fire. Biden administration says it wants to stop the damage. So far, they enable a project that makes the fire even bigger.”

The coming year will likely be crucial for the railroad as it seeks additional permits from the Forest Service, Department of Transportation and Bureau of Indian Affairs. Completion could be years away and requires defense against tax, environmental and safety concerns.

Since the violent derailment of a freight train in Ohio in February forced thousands to evacuate over the threat of hazardous chemicals, the specter of similar disasters has sowed fear in neighboring Colorado, where trains from the Uinta Basin would eventually pass to refinery centers near the Gulf accessible from Mexico. Concerned about oil trains traveling through its narrow canyons, Eagle County has joined environmentalists to sue the federal interim permits, and the state’s congressional delegation has urged the Biden administration to halt the project.

“These trains would travel right along the headwaters of the Colorado River — a vital water supply,” U.S. Senator Michael Bennet and U.S. Rep. Joe Neguse wrote in a letter last month about the route the trains would take once the new line is connected wider railway lines. “An oil spill in the headwaters of the Colorado River would be catastrophic.”

Most of the crude oil produced in the Uinta Basin is currently transported to refineries by heated tanker trucks traveling over mountains on a dual carriageway. Transportation costs are forcing producers to sell their casks, primarily to the five Salt Lake City-area refineries, at significantly less than they could fetch in larger markets in Gulf states like Texas, Louisiana and Mississippi.

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

“We’re in a high basin, we’re surrounded by mountains, and trucking involves risks and costs. It’s a lot more labor intensive and you can’t realistically ship a large amount of oil — 50,000 or 100,000 barrels a day — all the way to East Texas,” Reed Page, chief of gas marketing at Summit Energy, said at a press conference at the Oil and Mining Division meeting of the state this month. “But that can also be done economically by rail.”

Producers also argue that it will eventually allow them to develop oil shale and oil sands oil, which is currently too costly to implement. Environmentalists have denounced the potential impacts of both oils, arguing they are more energy intensive and dirtier than regular crude oil.

The proposal has already received approval from key federal agencies, including the Department of Transportation’s Surface Transportation Board. The US Forest Service granted a 12-mile (19-kilometer) right-of-way through Ashley National Forest, where three of the project’s five tunnels would be dug into mountainsides.

One such tunnel 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’s also unhappy that public money has been used to support the project.

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

Neither the Forest Service nor the Department of Transportation responded to questions from The Associated Press about the proposed railroad. In their permits, they stated that the project complies with federal laws protecting the environment and Biden ordinances on tribal consultations and environmental justice.

The Ute Indian tribe of the Uintah and Ouray reservations also did not respond to questions. Although tribes across the United States have been among the most vocal opponents of fossil fuels, the chairman of the tribe’s business committee said in a statement last year that “the economic well-being of our members depends on energy mineral production on our reservation.”

Funding for the project will be provided by the Seven County Infrastructure Coalition, an organization formed by officials from eastern Utah. They have used government grants throughout the permitting process and want the Department of Transportation to approve a request to issue $2 billion in tax-exempt bonds to fund the project. The infrastructure bill that Biden signed into law in 2021 doubled the department’s ability to approve bonds for private activities to $30 billion; The railroad would be the largest project they have approved to date.

Proponents say investors will see significant savings if developers can fund the project with tax-exempt bonds instead of traditional debt, which state and federal agencies tax like other income. Both supporters and opponents conceded that even with funding secured and all permits in place, the rail line is years away.

“Once this rail is built, it will be there for 100 or 200 years. Nobody knows whether oil will continue to be the most important commodity in the basin or not. But that rail will still be there and can be used to move whatever goods are needed,” said Keith Heaton, executive director of the Seven County Infrastructure Coalition.