Utah backs oil railway petition before U.S. Supreme Court

The state of Utah has joined a Native American tribe and labor and energy groups in an effort in the U.S. Supreme Court to keep a proposed bond-financed crude oil-transporting railway project from being derailed.

In so-called friend of the court brief last week, the parties backed Seven County Infrastructure Coalition's March petition asking the high court to review a 2023 federal appeals court ruling that found the U.S. Surface Transportation Board erred in approving an environment impact statement and biological opinion for the Uinta Basin Railway in 2021.

Bloomberg News

Utah Attorney General Sean Reyes contended the railway would boost economic development opportunities in a rural northeast area of the state, while also protecting the environment.

"The railway will be critical infrastructure facilitating the flow of commodities to and from the Uintah Basin," Reyes' brief stated. "It has the potential to open the region to entirely new markets that rely on freight shipping and to create jobs."

The Utah county coalition launched a public-private partnership for the railway in 2019 with 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 86-mile rail line 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 refineries.

Federal approval for the project was yanked in the wake of the August ruling by a Washington, D.C.-based federal appellate court panel in a case brought by Colorado's Eagle County and the Center for Biological Diversity.

The coalition's petition argued the appeals court ruling conflicted with a decision in a 2004 case and would require the federal transportation board to make environmental assessments for destinations where the crude oil would be shipped. 

"Seven County did not have contracts with any of those downstream refineries or with any upstream oil developers," the petition said. "So it had no way of knowing which shippers would use the new rail line, much less where the oil would go."

The coalition's position was supported in briefs filed by the Ute Indian Tribe, the Utah American Federation of Labor and Congress of Industrial Organizations, natural gas associations, and others.