U.S. Supreme Court accepts Utah oil railway case for review

Bonds

The U.S. Supreme Court on Monday agreed to take up an environmental challenge to a proposed bond-financed crude oil-transporting railway in Utah.

The Seven County Infrastructure Coalition, a Utah public entity that is spearheading the Uinta Basin Railway project, filed a petition in March asking the high court to review a portion of an August 2023 U.S. Appeals Court ruling that found the Federal Surface Transportation Board erred in approving an environment impact statement and biological opinion for the project in 2021.

A 2023 U.S. Appeals Court ruling derailed federal approvals for the Uinta Basin Railway, which plans to seek up to $2 billion in private-activity bonds.

Bloomberg News

The Center for Biological Diversity, which along with Colorado’s Eagle County sued the federal agency in 2022 over its approval, said the review will focus on the agency’s failure to analyze the project’s upstream drilling impacts on wildlife and vegetation and downstream refining impacts on Gulf Coast communities.

“The court will not review several other legal violations that the lower court found,” the environmental group said in a statement. “Those legal defects will prevent the project from moving forward regardless of how the Supreme Court ultimately rules.”

The appeals court ruling led to the revocation of a federal permit for the 85-mile rail line to be built under a public-private partnership between the coalition and Drexel Hamilton Infrastructure Partners, the owner of the Uinta Basin Railway limited liability company, which plans to seek up to $2 billion in private-activity bond authorization from the U.S. Department of Transportation for the project.

“The project team’s hope is that the high court reverses the D.C. Circuit Court ruling for the sake of future infrastructure projects across the country,” Casey Hopes, chair of the Seven County Infrastructure Coalition, said in a statement. “The (National Environmental Policy Act) process needs to be clarified and solidified.”

The coalition’s petition to the high court was supported by Utah’s attorney general, who filed a friend of the court brief that said the project would boost economic development opportunities in rural northeast Utah, as well as by a Native American tribe and labor and energy groups.

The railway would extend from two terminus points in the Uinta Basin to connect with an existing Union Pacific line, providing a cheaper alternative to trucking for shipping waxy crude oil produced in the basin to Gulf Coast and other refineries.

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