The Board Denies Requests to Reconsider its Preliminary Decision on the Transportation Merits of a Proposed Rail Construction and Operation Project

On September 30, 2021, the Surface Transportation Board (Board) issued a decision denying requests to reconsider the Board’s January 5, 2021 decision in Docket No. FD 36284, in which the Board preliminarily concluded, subject to completion of the environmental review, that the proposed construction and operation of approximately 85 miles of rail line in Utah meets the statutory exemption standard.  Seven Cnty. Infrastructure Coal.—Rail Constr. & Operation Exemption—in Utah, Carbon, Duchesne, & Uintah Counties, Utah,FD 36284 (STB served Sept. 30, 2021).

On May 29, 2020, the Seven County Infrastructure Coalition (Coalition) filed a petition for exemption under 49 U.S.C. § 10502 from the prior approval requirements of 49 U.S.C. § 10901 for approval to construct and operate a rail line connecting two termini in the Uinta Basin to the national rail network at Kyune, Utah (Uinta Basin Line).  Id., slip op. at 1.  The Coalition claimed that “regulation of the construction and operation of the proposed line under § 10901 was not needed to carry out the rail transportation policy (RTP) at 49 U.S.C. § 10101, that the project would promote several provisions of the RTP, and that an application under § 10901 was not required to protect shippers from an abuse of market power.”  Id., slip op. at 2.  The Coalition requested that, in considering the petition, the Board use a “two-step approach, addressing the transportation aspects of the project in advance of the environmental issues.”  Id. 

On January 5, 2021, the Board issued a decision assessing the transportation merits of the proposed transaction.  Seven Cnty. Infrastructure Coal.—Rail Constr. & Operation Exemption—in Utah, Carbon, Duchesne, & Uintah Counties, Utah,FD 36284 (STB served Jan. 5, 2021) (with Board Member Oberman dissenting).  The Board concluded that the requested approach of issuing a preliminary decision on the transportation merits was appropriate, and preliminarily concluded that the proposed transaction meets the statutory standards for exemption under § 10502.  Seven Cnty. Infrastructure Coal.—Rail Constr. & Operation Exemption—in Utah, Carbon, Duchesne, & Uintah Counties, Utah,FD 36284, slip op. at 2-3 (STB served Sept. 30, 2021). 

The Board received two petitions for reconsideration of the January 5 decision.  First, in a petition filed on January 25, 2021, by Eagle County, Colo. (Eagle County), Eagle County noted that the Colorado, Midland & Pacific Railway Company (CMPR) had recently filed a verified notice of exemption in Docket No. FD 36471 to lease and operate a dormant portion of the Tennessee Pass Line, which connects to the proposed Uinta Basin Line via Union Pacific Railroad Company.  Id., slip op. at 3.  Eagle County argued that “the reactivation of freight service in the Tennessee Pass corridor constitutes a materially changed circumstance that the Board must take into account in considering the potential impacts of granting the Coalition’s petition for exemption.”  Id.  Additionally, Eagle County asserted that the Board had committed material error in the January 5 decision, and Eagle County adopted the arguments in Board Member Oberman’s dissent.  Id.

            Second, in a petition filed on January 26, 2021, by the Center for Biological Diversity (Center), the Center argued that “the potential reactivation of the Tennessee Pass Line presents new circumstances supporting reconsideration.”  Id.  The Center also argued that, given the magnitude of the proposed project and the numerous interests at stake, “the Board should require further inquiry into the transportation merits of the proposed ‘oil railway.’”  Id.  Like Eagle County, the Center adopted the arguments in Board Member Oberman’s dissent.  Id.

            On February 12, 2021, the Coalition filed a reply opposing the two petitions for reconsideration.  Id., slip op. at 4.  The Coalition asserted that neither petition meets the Board’s standard for reconsideration.  Id.  Additionally, the Coalition argued that “CMPR’s lease does not change the potential for downline traffic on the Tennessee Pass Line from the Uinta Basin Railway and that the concerns raised by [Eagle] County and the Center are unfounded.”  Id.  The Coalition also argued that simply adopting the arguments made in a dissenting opinion, without elaboration, “does not satisfy the basic pleading requirements for a reconsideration petition, much less meet the petitioners’ burden of proving material error.”  Id.

            In a decision served on September 30, 2021, the Board denied the petitions for reconsideration.  The Board found that Eagle County and the Center failed to demonstrate substantially changed circumstances that would materially affect the January 5 decision.  Id., slip op. at 5.  Specifically, the Board noted that CMPR’s verified notice had been rejected and to date CMPR had not sought Board authority to lease and operate that line through any other procedures.  Id.  Additionally, even if the Tennessee Pass Line were reactivated, the volume of traffic that would move over the line, and whether, and to what extent, that traffic would include oil trains is speculative at best.  Id., slip op. at 6. 

The Board also found that Eagle County and the Center failed to demonstrate material error.  Id.  The Board rejected the petitioners’ argument that it should adopt Board Member Oberman’s dissent and stated that “the Board determined its approach after careful review of the evidence presented at that time.”  Id., slip op. at 7.  The Board also noted that “summarily asking the Board to reweigh the evidence is not sufficient to justify overturning the decision under review.”  Id.  Furthermore, the Board rejected Eagle County’s claim that the Board did not consider necessary aspects of the RTP.  Id.  The Board noted that it is “entitled to wide deference when deciding which factors of the RTP are relevant in decisions regarding exemptions,” and stated that it “did not and will not ignore necessary aspects of the RTP.”  Id.  Thus, the Board denied the petitions for reconsideration.

The Board noted that it will next issue a final decision assessing the potential environmental and historic impacts of the construction proposal.  Id., slip op. at 8.  That decision will address the Office of Environmental Analysis’ (OEA) recommendations and will determine whether the exemption will become effective.  Id.

            Board Member Oberman submitted a dissent stating that, as explained in his dissent to the January 5 decision, “the Board should have withheld any judgment on the Uinta Basin Line’s transportation merits until after assessing the project’s environmental and historic impacts.”  Id.  Board Member Oberman stated that his recent dissent in Ken Tenn Regional Rail Partners, Inc.— Constr. & Operation Exemption—in Fulton County, Ky., & Obion County, Tenn., FD 36328 (STB served July 23, 2021) “explains the importance of the Board adhering to its previously stated policy of not preliminarily exempting rail construction projects except in cases of unique or compelling circumstances.”  Seven Cnty. Infrastructure Coal.—Rail Constr. & Operation Exemption—in Utah, Carbon, Duchesne, & Uintah Counties, Utah,FD 36284, slip op. at 8 (STB served Sept. 30, 2021).  Board Member Oberman also stated that “the Board must complete its environmental and historic review, including by considering potential impacts analyzed by [OEA], before it may authorize construction.”  Id.

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