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Conservation groups urge Buttigieg to reject Utah oil train request for $2 billion in tax-exempt bonds

March 29, 2023, 7:53 am

The Center for Biological Diversity on Tuesday issued the following press on its efforts, along with more than 150 conservation and climate groups, to get U.S. Transportation Secretary Pete Buttigieg to deny Utah officials’ $2 billion request to help them build the Uinta Basin Railway oil train legally opposed by Eagle County:

Pete Buttigieg

SALT LAKE CITY— More than 150 conservation and climate groups today joined Colorado federal, state and local lawmakers to urge Transportation Secretary Pete Buttigieg to deny Utah officials’ $2 billion request to help them build an oil train. The tax-exempt bonds, requested earlier this month by Utah’s Seven County Infrastructure Coalition, will cost taxpayers up to $80 million a year for decades.

The Uinta Basin Railway is expected to nearly quintuple oil production in Utah’s Uinta Basin, to 350,000 barrels a day, by linking its oilfields to national rail networks, producing as much carbon pollution as the nation’s three dirtiest coal plants combined. Most of the crude will travel through the Colorado Rockies and then on to Gulf Coast refineries, increasing emissions in these communities and threatening toxic chemical spills along its route.

“As the recent, disastrous train derailment and chemical spill in East Palestine, Ohio shows, rail transportation of hazardous materials threatens communities, air, and water along the way,” the letter to Buttigieg said. “The Department of Transportation should not facilitate a massive increase in the transport of hazardous waxy crude oil on the rail system, thereby increasing the risk of another catastrophic derailment.”

Railway developers plan to run up to 180,000 rail cars per year loaded with waxy crude oil through drought-stricken, wildfire-prone landscapes in Utah and Colorado, including a 100-mile stretch of the Colorado River, the source of drinking water for 40 million people.

“This would be a massive federal tax break for a dangerous, polluting railway project that clearly doesn’t serve the public’s interest. The Biden administration should firmly reject it,” said Deeda Seed, senior campaigner at the Center for Biological Diversity. “President Biden has pledged to reduce carbon emissions and fight the climate emergency. This is a prime opportunity for him to do so.”

Colorado Sens. Michael Bennet and John Hickenlooper and Rep. Joe Neguse, state lawmakers, and local governments in Colorado this month renewed their push to halt the railway in the wake of the Ohio train wreck and the Utah coalition’s request for tax-free financing.

“If issued, this would not only constitute the largest (private activity bond) the DOT has ever issued; it would also irretrievably sink taxpayer dollars into a project that has proven unable to contain its own costs,” said a letter from Bennet, Hickenlooper and Neguse. “While the risks to Colorado’s environment and local communities remain real, the developers’ stated need for tax-free funding suggests that the economic benefits of this project may be overstated.”

A federal agency review concluded the proposed railway would add up to 87 million gallons of waxy crude each week to the interstate rail system. About once a year, according to federal projections, a fully loaded oil train will derail along the route between Kyune, Utah, and Denver. The city of Denver estimates the railway will quadruple the number of railcars carrying hazardous materials through the city.

Project backers say the $2 billion in bonds represents up to 70% of the funding the railway needs to raise. That means the total cost of the oil train is now estimated at up to $2.9 billion, more than twice the $1.35 billion predicted by the Surface Transportation Board when it analyzed the project in 2021.

Buttigieg can deny the Utah coalition’s request to issue tax-exempt bonds. Congress directed the department to approve up to $30 billion in tax-exempt private activity bonds, and so far it’s financed highways and other projects that benefit the motorists, rail passengers and the general public. There’s no precedent for funding a railway that would transport only oil and benefit the oil industry alone.

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