Proponents of construction of the Uinta Basin Railway received all positive comments during a bond hearing held on Aug. 25 at the Duchesne County Administrative offices. It followed a similar bond hearing held by the Seven County Infrastructure Coalition in June.
The group is hoping to build a rail line in eastern Utah to connect the oil production area to national rail lines, expediting the export of waxy crude oil to refineries along the Gulf Coast. The coalition includes representatives from Daggett, Carbon, Duchesne, Emery, San Juan, Sevier and Uintah counties. With the proposed railway are expected growth in jobs and subsequent real estate opportunities as new employees relocate to the basin.
The notice for bonds for the project states it is for the “Issuance of Private Activity Bonds in an Amount Not Exceeding $2.4 Billion Dollars to Finance Rail Surface Transportation and Freight Transfer Facility and Related Improvements.” The money comes from private activity bonds from the U.S. Department of Transportation.
As explained in its public notice about hearings, “the proceeds of the Bonds will be loaned to Uinta Basin Railway Holdings LLC or one or more of its subsidiaries or related entities (collectively, the ‘Borrower’). The Borrower will use the proceeds of the Bonds to acquire land and to acquire, construct and equip rail surface transportation and freight transfer facilities and related improvements, including but not limited to temporary storage facilities, from the Kyune, Utah, area near Soldier Summit in Utah County to the Uinta Basin area in northeastern Utah and including land in Utah, Carbon, Duchesne and Uintah counties, consisting of approximately 88 miles, and with freight transfer facilities to be located at or near Lelan Bench, Utah, and Myton, Utah (collectively, the “Project”). The Project will be owned and operated in whole or in part by the Borrower. Proceeds of the Bonds will be used by the Borrower for the purpose of (i) acquiring, constructing and equipping the Project, (ii) funding debt service reserves, if any, (iii) funding capitalized interest on the Bonds, if any, and (iv) paying costs associated with the issuance of the Bonds.”
If the railway extension becomes reality, it could allow transport of an estimated 350,000 barrels of oil a day, much higher than the current refinery capacity in Salt Lake City, which is about 85,000 barrels a day. The rail line would mean exporting through Colorado, where environmental groups have been fighting it in courts. In May, the U.S. Supreme Court overturned a lower court ruling that sided with the environmental group’s arguments, returning the issue to a lower court. For now, proponents are optimistic about the future of the project.