Greens sue over $1.5 bln rail project for Utah heavy crude

Unused oil tank cars are pictured on Western New York & Pennsylvania Railroad tracks outside Hindsdale, New York
Unused oil tank cars are pictured on Western New York & Pennsylvania Railroad tracks outside Hinsdale, New York August 24, 2015. REUTERS/Lindsay DeDario
  • Uinta Basin Railway project December approval challenged in D.C. court
  • Plaintiffs say feds inadequately factored project's role in spurring oil production

(Reuters) - Conservation groups on Friday accused the U.S. Surface Transportation Board (STB) of improperly approving a roughly $1.5 billion rail line in Utah's Uinta Basin because the resulting boost in the area's oil output would aggravate climate change.

The Center for Biological Diversity and others asked a Washington, D.C., appeals court to review the Dec. 15 approval of the Uinta Basin Railway project, an 85-mile rail line that would give shippers of crude oil and other commodities an alternative to trucking, currently the only available transportation option.

The line, whose construction is scheduled for 2024, would connect the basin in resource-rich northeastern Utah to the national rail network. Crude oil would then be shipped to coastal refineries.

Its developers, the Seven County Infrastructure Coalition, investor DHIP Group, formerly Drexel Hamilton Infrastructure Partners, and rail operator Rio Grande Pacific Corp, say it is the best option to transport the basin's waxy crude because moving it by pipeline requires heating the oil.

Michael Booth, a spokesperson with the STB, declined to comment on the lawsuit. He said that the federal agency "is extremely transparent in its decisions."

Project supporters say the railroad will bring economic growth to the rural area.

But Friday's plaintiffs say its environmental costs are too high.

Total oil production in the basin could increase by up to 350,000 barrels per day over the rail line's first 15 years, resulting in as much as 53 million metric tons of carbon dioxide emissions annually, STB's record of decision shows.

The plaintiffs allege that the agency failed to adequately consider the project's role in spurring the increased oil production and its associated greenhouse gases, in violation of the National Environmental Policy Act.

Uinta Basin Railway project representatives did not immediately respond to a request for comment.

Friday's lawsuit comes a year and a half after the Center for Biological Diversity sued a Utah state agency in state court for committing nearly $28 million in oil and mining royalties toward the project. That lawsuit is pending.

The case is Center for Biological Diversity, et al v. STB, et al, U.S. Circuit Court of Appeals for the D.C. Circuit, No. 22-1020.

For Center for Biological Diversity, et al: Bill Snape with the American University Washington College of Law

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New York-based correspondent covering environmental, climate and energy litigation.