Colorado River Carbon Bomb: Utah's Uinta Railway Project
Backers of a proposed crude-by-rail project in northeastern Utah—which would unleash a carbon bomb potentially larger than the controversial Willow Project—want taxpayer support to the tune of $2 billion.
Utah’s Uinta Basin has been a center of oil production in the U.S. for nearly 80 years. But, given the type of crude oil found there and its remote location, oil production had historically remained a marginal business. Now, new drilling technology, availability of new refining abilities, and demand from Gulf Coast refineries is driving a production boom in this remote corner of Utah.
Historically, production from the Uinta Basin was capped by the capacity of nearby refineries who refined the yellow and black waxy crude oil that comes out of the ground there. That meant production couldn’t exceed around 85,000 barrels per day (bpd). However, with the ability to now load that crude onto Union Pacific Railway trains headed to the Gulf Coast, production has surged as high as 135,000 bpd. Because of the unique geography of the area, all that oil is currently moved out by tanker trucks.
Enter the Uinta Basin Railway project, a proposed, brand new, 85-mile rail line that would connect the Uinta Basin’s oil fields to the Union Pacific system. According to the project’s proponents, it isn’t designed to take tanker trucks off local roads. Instead, the project is all about future growth. Proponents—a coalition of seven Utah counties—envision unlocking 130,000-350,000 bpd of new crude production.
A Carbon Bomb in Disguise
That’s a shocking amount of growth for an oil field that produces a highly unusual form of crude oil—a hard, waxy crude that solidifies at temperatures below 110 degrees. Because of its unique chemistry, it cannot be transported via pipeline. Rather, it must be shipped either by truck or rail inside specially heated tanks, all of which has meant that Unita crude has been economically marginal for most of its history.
But access to a larger market could change all of that. And what makes it truly shocking is its cumulative greenhouse gas emissions, which could surpass the globally controversial Willow Project. That’s because at Willow’s peak, daily production is estimated at 180,000 bpd, while the Uinta Basin Railway proponents see their fields adding up to 350,000 bpd of new production.
According to the Surface Transportation Board's Environmental Impact Statement (EIS) for the project, the high-end production scenario unlocked by this rail line could lead to more than 53 million metric tons of annual greenhouse gas emissions from the combustion of this oil. Given the International Energy Agency’s admonition that no new crude oil supply projects should be brought online to keep global temperature rise in check, the Uinta Basin Railway provides a textbook example of a project with no future in a climate-constrained world. Any federal decisions that could lead to the project’s construction--be they permits or financial assurances--are equivalent to the green lighting of a significant, long-term increase in unneeded and risky oil production.
A Threat to Precious Western Water Supplies
If you read the EIS for the Uinta Basin Railway project, you’d be deceived into believing it’s just about moving crude oil 85 miles closer to the Salt Lake City area and that its impacts are limited in scope. However, nothing could be further from the truth. The surge in growth this project would unlock is all about connecting the Uinta Basin to Gulf Coast refineries, which have bought increasing volumes of this oil in recent years and have the specialized refining equipment necessary to turn this oil into usable products.
What that means on the ground is that this project is about tying into the rail systems that can be used to get the oil all the way to the Gulf Coast. That means primarily using Union Pacific’s rail line, which runs through the Rocky Mountains alongside the headwaters of the Colorado River.
According to the project’s EIS, the extraordinary increase in crude-by-rail traffic facilitated by the project could lead to a derailment every year. Should that derailment be significant, there is a high probability that ruptured tank cars would leak oil into nearby waterways. In a letter from Colorado's U.S. Senators Bennet and Hickenlooper, joined by Colorado Representative Neguse, this risk is called out specifically given how difficult a major response effort would be in the route’s rugged and remote terrain.
Equally concerning are the properties of the oil itself and what might happen should a spill take place in rapidly moving water without a near-immediate response effort. Though project proponents claim that the Uinta’s waxy crudes are “clean up friendly,” their unique qualities should raise serious concerns. For crude oils that quickly solidify when spilled into water, long term contamination is always a serious risk should the oil adhere to the river bottom as it biodegrades. The extraordinary lack of scientific basis for concluding minimal spill risks within the EIS should raise alarm bells for anyone looking at this project. Given that this oil would move alongside one of the West’s most critical water bodies, robust consideration of spill risks and response limitations should have been paramount to the environmental analysis that was conducted.
Instead, the Surface Transportation Board has accepted the Uinta Railway Project's voluntary commitment to prepare an emergency response plan applicable only to the 85 miles of new rail line encompassing this project. The increased risks and emergency response capacities beyond that short distance are simply ignored, as if the thousands of miles left for the oil to travel simply do not exist.
A Project with Ballooning Costs Requests Taxpayer Support
When the Uinta Basin Railway project was first proposed, its proponents assured regulators and the public that the entire thing would be funded by private interests. In the intervening years, as the project’s costs have ballooned from $1.2 billion to $2.9 billion, things have changed. Now, project proponents are seeking what are known as “private activity bonds,” which are low-interest, taxpayer funded bonds issued by the Department of Transportation (DOT). DOT has a pot of $30 billion available for issuing these bonds, with nearly $17 billion already out the door.
Project proponents now hope to access 15% of that remaining pot, even though DOT’s bonds to date have supported highway and rail transit projects.
Indeed, the Uinta Basin Railway is a decidedly poor fit for these financial supports. Its sole purpose is moving crude oil out of the Uinta Basin. Few other commodities come from the area and project proponents have made no attempt to play up the rail line’s potential for diversifying markets for local commodities. Instead, they’ve doubled down on the assertion that the rail line will be about oil, oil, oil. Given the congressional desire that private activity bonds “increase private sector investment in U.S. transportation infrastructure,” using these bonds for a project with almost no meaningful utility aside from expanding oil production represents a gross misuse of limited federal funds.
A Project with Unacceptable Risks to the Climate and Fresh Water
In the aftermath of the Willow Project’s approval, the federal government must take greater care in its management of projects designed to lock in massive quantities of future greenhouse gas emissions. The Uinta Basin Railway project is one of these. Its approval and financial support would represent an extraordinary misuse of federal funds at a time when so much federal investment and effort is going to decarbonizing the U.S. economy. Instead, the federal government should be partnering with state and local governments to diversify the economy of this region instead of locking it into another century of dependence on oil.