1564 Federal Register / Vol. 86, No. 5 / Friday, January 8, 2021 / Notices 

1Based on a request from Argyle, the Board 

extended the due date for comments on the petition 

for an additional 20 days to July 7, 2020. 

2On July 13, 2020, the Center submitted a 

supplemental filing consisting of the references 

cited in its reply. 

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* * Activities in parentheticals are 

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Manisha Singh, 

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[FR Doc. 2021–00061 Filed 1–7–21; 8:45 am] 

BILLING CODE 4710–29–P 

SURFACE TRANSPORTATION BOARD 

[Docket No. FD 36284] 

Seven County Infrastructure 

Coalition—Rail Construction & 

Operation Exemption—In Utah, 

Carbon, Duchesne, and Uintah 

Counties, Utah 

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 

authorization to construct and operate 

an approximately 85-mile rail line 

connecting two termini in the Uinta 

Basin near South Myton Bench, Utah, 

and Leland Bench, Utah, to the national 

rail network at Kyune, Utah. The 

Coalition asks that the Board issue a 

preliminary decision addressing the 

transportation aspects of the project 

while the environmental review is 

ongoing. 

The Board received filings both 

supporting and opposing the petition. 

Several government officials have filed 

in support, as discussed below. The 

opponents include the Center for 

Biological Diversity (Center), the Argyle 

Wilderness Preservation Alliance 

(Argyle), and numerous individuals. 

These commenters argue, among other 

things, that the requested preliminary 

decision is not appropriate, that the 

transportation aspects of the petition do 

not satisfy the section 10502 standards, 

and that the Board should reject the 

petition and require an application 

under section 10901. 

As discussed below, the Board 

concludes that an application is not 

necessary and that the requested 

approach of issuing a preliminary 

decision on the transportation merits is 

appropriate here. The Board 

preliminarily concludes, subject to 

completion of the ongoing 

environmental review, that the 

proposed transaction meets the statutory 

standards for exemption under section 

10502. This decision only addresses the 

transportation merits, however, and 

does not grant the exemption or allow 

construction to begin. After the Board 

has considered the potential 

environmental impacts associated with 

this proposal, and weighed those 

potential impacts with the 

transportation merits, it will issue a 

final decision either granting the 

exemption, with conditions, if 

appropriate, or denying it. 

Background 

The Coalition explains that it is an 

independent political subdivision of the 

State of Utah, whose member counties 

include Carbon, Daggett, Duchesne, 

Emery, San Juan, Sevier, and Uintah 

Counties. (Pet. 5.) It was formed to, 

among other things, identify and 

develop infrastructure projects that will 

promote resource utilization and 

development. (Id.) The Coalition is 

proposing to construct a rail line that 

would extend generally southwest from 

terminus points in the Uinta Basin to a 

connection with an existing rail line 

owned by Union Pacific Railroad 

Company (UP) near Kyune, Utah (the 

Whitmore Park Alternative). The rail 

line would generally parallel U.S. Route 

191 through Indian Canyon and would 

be located within Utah, Carbon, 

Duchesne, and Uintah Counties in Utah. 

(Id. at 8–9, 43.) 

The Coalition asserts that goods 

produced or consumed in the Uinta 

Basin today can be transported only by 

truck and that the proposed project 

would give shippers an additional 

freight transportation option, 

eliminating longstanding transportation 

constraints. (Pet. 13–15.) The Coalition 

claims that adding a rail transportation 

option would provide local industries 

the opportunity to access new markets 

and increase their competitiveness in 

the national marketplace, and the 

removal of transportation constraints 

would benefit oil producers, mining 

companies, ranchers, farmers, and other 

local industries. (Id. at 15.) 

The Coalition argues that regulation of 

the construction and operation of the 

proposed line under section 10901 is 

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 section 10901 is 

not required to protect shippers from an 

abuse of market power. (Pet. 21–22.) As 

noted above, the Coalition requests that, 

in considering the petition, the Board 

follow a two-step approach, addressing 

the transportation aspects of the project 

in advance of the environmental issues. 

(Id. at 26–28.) 1

On July 7, 2020, the Center filed a 

reply 2 arguing that the Coalition has 

failed to justify its request for a 

preliminary decision on the 

transportation merits and that the Board 

should reject the petition and require 

the Coalition to seek its authority 

through an application under section 

10901. (Ctr. Reply 1.) On the same day, 

Argyle also filed a reply, likewise 

arguing that the Board should reject the 


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3Letters were also filed separately by individuals 

Julie Mach on July 6, 2020, Powell T. Wood on July 

8, 2020, and Alan T. Robinson on July 16, 2020. 4The Coalition filed a letter on July 22, 2020, 

updating its response. 

5The Center also argues that greater scrutiny is 

necessary here because there were irregularities in 

the selection of a developer and the award of a 

$27.9 million grant from the Utah Permanent 

Community Impact Board. (Ctr. Reply 12–16.) The 

Center further claims that the Coalition has failed 

to provide the public information or solicit its input 

as part of the Coalition’s decisionmaking regarding 

the rail project. (Id. at 16–19.) These concerns, 

however, appear to be based on Utah state law and 

should be raised in a different forum. 

petition for exemption and require 

greater scrutiny of the proposed project 

through an application. (Argyle Reply 9, 

July 7, 2020.) Argyle argues that, if it is 

not rejected, the petition for exemption 

should be denied because the project 

undermines various RTP goals. (Id.) 

Argyle also claims that the Coalition has 

failed to justify its requested two-step 

review process. (Id. at 14.) Additionally, 

by separate filings submitted on July 7, 

2020, Argyle submitted numerous 

letters from individuals opposing the 

project.3

On July 21, 2020, the Coalition filed 

a response to the various filings and 

filed a motion asking that the Board 

accept its reply.4 Argyle filed in 

opposition to that motion on August 10, 

2020. On September 14, 2020, Argyle 

filed a letter asking that the Board take 

notice of Texas Central Railroad & 

Infrastructure, Inc—Petition for 

Exemption—Passenger Rail Line 

Between Dallas & Houston, Tex., FD 

36025 (STB served July 16, 2020), a 

decision Argyle claims supports its 

position that an application is 

warranted here. 

The Board has also received several 

letters in support of the Coalition’s 

proposal. On November 20, 2019, 

Governor Gary R. Herbert submitted a 

letter stating that the proposed rail line 

represents an important opportunity to 

enhance the rural economies in eastern 

Utah and improve the state’s energy 

infrastructure and environmental 

stewardship. On December 1, 2020, a 

joint letter supporting the Coalition’s 

project was filed by U.S. Senators Mitt 

Romney and Mike Lee and U.S. 

Representatives Rob Bishop, Chris 

Stewart, and John Curtis. On December 

7, 2020, Utah State Senate President J. 

Stuart Adams and Utah State House of 

Representatives Speaker Brad Wilson 

separately filed letters in support of the 

project. Also on December 7, 2020, 

Governor Herbert, Lieutenant Governor 

Spencer J. Cox, Utah State Senate 

President Adams, and Utah State House 

of Representatives Speaker Wilson 

submitted a joint letter supporting the 

project. 

Preliminary Matters 

On August 26, 2020, the Director of 

the Office of Proceedings instituted a 

proceeding under 49 U.S.C. 10502(b). 

That decision stated that the Coalition’s 

July 21 motion for leave to file and other 

late-filed submissions would be 

addressed in a subsequent decision. 

The Board will grant the Coalition’s 

motion for leave to file and accept its 

July 21, 2020 filing. Although 49 CFR 

part 1121 does not provide for rebuttals 

and the Board struck such filings in the 

cases Argyle cites, the Board’s action in 

those cases was primarily focused on 

the fact that the rebuttals there were 

filed shortly before a regulatory 

deadline, a factor that is not present 

here. See Burlington N. & Santa Fe 

Ry.—Aban. of Chi. Area Trackage in 

Cook Cnty., Ill., AB 6 (Sub-No. 382X), 

slip op. at 1–2 (STB served Sept. 21, 

1999) (filing rejected where regulatory 

deadline precluded protestants’ 

response); Cent. R.R. of Ind.—Aban. 

Exemption—in Dearborn, Decatur, 

Franklin, Ripley, & Shelby Cntys., Ind., 

AB 459 (Sub-No. 2X), slip op. at 3 (STB 

served May 4, 1998) (filing rejected four 

days before regulatory deadline). In light 

of the arguments raised here regarding 

the appropriateness of the exemption 

process and the request for a 

preliminary decision on the 

transportation merits, the Coalition’s 

filing provides a more complete record 

for the Board to consider these 

arguments. Also in the interest of a more 

complete record, the Board will accept 

all of the comments and letters that have 

been filed with the Board. 

Discussion and Conclusions 

The construction of new railroad lines 

that are to be part of the interstate rail 

network requires prior Board 

authorization, either through issuance of 

a certificate under 49 U.S.C. 10901 or, 

as requested here, through an exemption 

under 49 U.S.C. 10502 from the formal 

application procedures of section 10901. 

Section 10901(c) directs the Board to 

grant rail construction proposals 

‘‘unless the Board finds that such 

activities are inconsistent with the 

public convenience and necessity.’’ See 

Alaska R.R.—Constr. & Operation 

Exemption—A Rail Line Extension to 

Port MacKenzie, Alaska, FD 35095, slip 

op. at 5 (STB served Nov. 21, 2011), 

aff’d sub nom. Alaska Survival v. STB, 

705 F.3d 1073 (9th Cir. 2013) 

(addressing the Board’s construction 

exemption process). Thus, Congress has 

established a presumption that rail 

construction projects are in the public 

interest unless shown otherwise. See 

Lone Star R.R.—Track Constr. & 

Operation Exemption—in Howard 

Cnty., Tex., FD 35874, slip op. at 3 (STB 

served Mar. 3, 2016.). 

Under 49 U.S.C. 10502(a), however, 

the Board, ‘‘to the maximum extent’’ 

consistent with 49 U.S.C. 10101–10908, 

‘‘shall exempt’’ a transaction (including 

a construction proposal) from the prior 

approval requirements of section 10901 

when it finds that: (1) Regulation is not 

necessary to carry out the RTP of 49 

U.S.C. 10101; and (2) either (a) the 

transaction is of limited scope or (b) 

application of the statutory provision is 

not needed to protect shippers from the 

abuse of market power. Ken Tenn Reg’l 

Rail Partners—Constr. & Operation 

Exemption—in Fulton Cnty., Ky. & 

Obion Cnty., Tenn., FD 36328, slip op. 

at 3 (STB served Dec. 1, 2020.) Congress 

thus has directed the Board to exempt 

a rail construction proposal from the 

requirements of the full application 

process—even if significant in scope— 

so long as the application of section 

10901 is not necessary to carry out the 

RTP and there is no danger of market 

power abuse. See Alaska Survival, 705 

F.3d at 1082–83; Vill. of Palestine v. 

ICC, 936 F.2d 1335, 1337, 1340 (D.C. 

Cir. 1991). 

Application vs. Petition for Exemption 

The Center argues that the Board 

should reject the petition and require 

the Coalition to seek its authority 

through an application under section 

10901. Among other reasons, the Center 

claims greater scrutiny is required 

because the project would not be 

financially viable and could pose 

significant financial risk to public 

entities and taxpayers, the most likely 

source of funding through the issuance 

of municipal bonds.5 (Ctr. Reply 2, 7, 

12, 20–21.) 

The Center maintains that there are 

insufficient proven oil quantities in the 

Uinta Basin to justify the project’s 

construction, and that there is a limited 

portfolio of potential industries and 

shipping commodities that the railway 

could service. (Id. at 2.) Furthermore, it 

argues that the ‘‘collapse’’ in the global 

oil market and the American shale 

industry as well as weak market 

forecasts make it unlikely that a real 

need for new crude oil transportation 

capacity exists in the Basin. (Id.) 

Therefore, the Center contends, the 

public might be ‘‘on the hook’’ for a 

multibillion-dollar project unable to pay 

for itself. (Id.) 

The Center also notes that the 2018 

pre-feasibility study, prepared for the 

Coalition by R.L. Banks & Associates, 

Inc. (R.L. Banks), provides an analysis of 

the proposed line, but the Center asserts 


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6The Center asserts that the Basin holds only 

approximately five years’ worth of oil at the most 

by pointing to a U.S. Energy Information 

Administration estimate from 2019. (Ctr. Reply 23– 

24.) This figure, however, only covers ‘‘proved 

reserves,’’ (Ctr. Supp. 662), and, as the Center itself 

admits, estimates of the amount of oil in the Basin 

‘‘vary widely,’’ (Ctr. Reply 23). Indeed, the 2018 

pre-feasibility study from R.L. Banks lists a much 

higher range. (Ctr. Supp. 392.) 

7For the same reasons, the Board does not need 

the material currently redacted in the R.L. Banks 

2018 feasibility study obtained by the Center, 

despite the Center’s claim to the contrary. (Ctr. 

Reply 25.) 

8See, e.g., Cal. High-Speed Rail Auth., FD 35724 

(Sub-No. 1) (STB served Aug. 14, 2014); Cal. HighSpeed Rail Auth.—Constr. Exemption—in Merced, 

Madera & Fresno Cntys., Cal., FD 35724 (STB 

served June 13, 2013); Alaska R.R., FD 35095; and 

San Jacinto Rail Constr. Exemption—Build Out to 

the Bayport Loop Near Houston, Harris Cnty., Tex., 

FD 34079 (STB served Aug. 28, 2002). 

that the Coalition has refused to release 

an unredacted version of that study. (Id. 

at 22–23, 25.) In redacted versions of the 

study, which the Center submits in its 

July 13, 2020 supplement, the Coalition 

redacted the market forecast, 

transportation rate, and other data 

underlying the study’s conclusions on 

the economic feasibility of the project. 

(Id. at 25.) The Center argues that such 

data should be made publicly available 

so that the Board and the public can 

determine whether assertions of the 

proposed line’s viability are based on 

reasonable assumptions. (Id.) 

Finally, the Center states that the 

construction cost of a rail line similar to 

the Coalition’s preferred route here was 

projected in 2015 to cost $4.5 billion, 

but the Coalition’s projections for the 

current preferred route are now onethird of that 2015 estimate, raising 

questions as to the reliability of the 

Coalition’s cost projections. (Id. at 19.) 

The Center further states that the 

required financing for the project has 

not yet been secured and asserts that it 

appears increasingly unlikely that 

financing can be achieved for a 

potentially multibillion-dollar project. 

(Id.) 

Similarly, Argyle opposes the project 

proceeding by exemption. It claims that 

such an approach is not appropriate 

where, as here, the proposal is 

vigorously contested and highly 

controversial. (Argyle Reply 3–4, July 7, 

2020.) Argyle also claims that there is 

neither evidence of financial ability to 

complete the proposed construction nor 

evidence of public need for the project. 

(Id. at 4–9.) For these reasons, it argues 

that the Board should reject the petition 

and require a full application. In its 

September 14, 2020 filing, Argyle notes 

that the Board required an application 

for the construction proposed in Texas 

Central Railroad & Infrastructure, Inc., 

FD 36025, slip op. at 13–15. The 

individual commenters raise concerns 

similar to Argyle’s and claim, among 

other things, that the there is no need 

for the rail line and that constructing it 

would needlessly disrupt landowners 

use of their land and adversely affect the 

rural area in which the proposed line 

would be constructed. 

The Coalition responds that the 

opposition has raised no serious 

question showing that the project 

should not be decided under the 

exemption criteria at section 10502. 

(Coalition Reply 3–4, July 21, 2020.) The 

Coalition adds that controversy does not 

preclude use of the exemption process, 

(id. at 6), and that questions raised by 

opponents regarding the project’s 

financial viability are based on 

speculation rather than fact, (id. at 8). 

The Coalition further asserts that Texas 

Central Railroad & Infrastructure, Inc., 

is inapposite. (Rebuttal 10.) 

The arguments presented by the 

opponents do not warrant rejecting the 

petition and requiring an application. 

There is nothing in the language of 

section 10502 to suggest that an 

exemption proceeding is inappropriate 

if the viability of the proposed rail line 

is questioned. See Alaska Survival, 705 

F.3d at 1082 (affirming the Board’s 

exemption proceeding where financial 

viability of the line was questioned). 

Furthermore, the Board’s grant of 

authority to construct a line (whether 

under section 10901 or by exemption 

under section 10502) is permissive, not 

mandatory—that is, the Board does not 

require that an approved line be built. 

See U.S. Dep’t of Energy—Rail Constr. & 

Operation—Caliente Rail Line in 

Lincoln, Nye & Esmeralda Cntys., Nev., 

FD 35106, slip op. at 3 (STB served June 

27, 2008); Dakota, Minn. & E. R.R. Corp. 

Constr. Into the Powder River Basin, FD 

33407, slip op. at 19 (STB served Feb. 

15, 2006). As a result, the Board has 

repeatedly recognized that the ultimate 

decision to go forward with an approved 

project is in the hands of the applicant 

and the financial marketplace, not the 

agency. See Mid States Coal. for 

Progress v. STB, 345 F.3d 520, 552 (8th 

Cir. 2003) (noting the insight and 

expertise of financial institutions and 

agreeing with the Board that the 

ultimate test of financial fitness will 

come when the railroad seeks 

financing); U.S. Dep’t of Energy, FD 

35106, slip op. at 3. Simply put, the 

Board’s grant of authority permits a new 

rail line to be built if the necessary 

financing is obtained. Without moving 

forward with the process needed to 

obtain Board authority, however, no 

new rail lines could be built, regardless 

of how viable the projects might be. 

In addition, the Coalition recognizes 

that conditions beyond its control can 

affect the amount of rail traffic on the 

proposed line, (Pet. 15), and, prior to 

seeking authority from the Board for this 

project, the Coalition asked R.L. Banks 

to prepare a detailed 2018 feasibility 

study addressing the viability of the 

line. Moreover, the Utah Petroleum 

Association, Enefit Oil Company, Utah 

Royalty Owners Association, National 

Oil Shale Association, and Western 

Energy Alliance have expressed support 

for the project. (Coalition Reply 16, July 

21, 2020.) 6 Such support, and the 

information submitted in this record, 

indicates the proposed line could be 

viable. And, despite claims by the 

opponents that there is no public need 

for the line, the support that this project 

has received suggests otherwise. 

It is well settled that, because the 

Board’s authority is permissive, the 

Board may grant authority to construct 

a line even if all outstanding issues 

related to the proposed construction, 

such as financing, have not yet been 

resolved or if factors beyond the Board’s 

control might ultimately prevent 

consummation of authority for a 

proposed construction. See Mid States 

Coal. for Progress, 345 F.3d at 552; Cal. 

High-Speed Rail Auth.—Constr. 

Exemption—in Fresno, Kings, Tulare, & 

Kern Cntys., Cal., FD 35724 (Sub-No. 1), 

slip op. at 11 (STB served Aug. 12, 

2014) (with Board Member Begeman 

dissenting). The Board does not find 

that the additional financial information 

sought by Argyle is necessary in this 

proceeding.7

The opponents’ filings also do not 

lead to a conclusion that an application 

is necessary here. To be clear, the 

agency has found the exemption process 

suitable in considering other projects 

that have drawn opposition.8 To the 

extent opponents here raise 

environmental issues, the 

environmental review conducted by the 

Board does not depend on whether the 

proposed construction is decided under 

section 10901 or section 10502—the 

environmental review process is the 

same under either scenario. See Cal. 

High-Speed Rail Auth., FD 35724 (SubNo. 1), slip op at 11 (STB served Aug. 

12, 2014). 

The Board’s decisions in Ozark 

Mountain Railroad—Construction 

Exemption, FD 32204 (ICC served Sept. 

25, 1995), and Texas Central Railroad & 

Infrastructure, Inc, FD 36025, slip op. at 

13–15, do not show that an application 

is necessary here. In Ozark Mountain 

Railroad, the agency required an 

application under section 10901 for the 

proposed construction of a highly 

controversial passenger excursion train 


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9That is not to say that any increase in project 

costs or uncertainty about funding sources 

necessitate an application, given that the ultimate 

test of financial fitness is in the hands of the 

applicant and marketplace. However, when those 

two factors are both substantial and inadequately or 

inconsistently addressed, combined with other 

relevant factors, including the extent to which the 

marketplace will assess financial fitness, additional 

scrutiny may be warranted. 

10 In fact, the Center questions whether the costs 

for the project are too low because they are lower 

than a similar project the Utah Department of 

Transportation studied in 2015. (Ctr. Reply 19.) As 

the Coalition explains, however, that project was 

different because, among other things, it involved 

the reconstruction of an existing highway, which is 

not part of the project at issue here. (Coalition Reply 

13, July 21, 2020.) 

11See Six Cnty. Ass’n of Gov’ts—Constr. & 

Operation Exemption—A Rail Line Between Levan 

& Salina, Utah, FD 34075 (STB served Sept. 3, 

2015); Alaska R.R.—Constr. & Operation 

Exemption—Rail Line Between Eielson Air Force 

Base & Fort Greely, Alaska, FD 34658 (STB served 

Oct. 4, 2007). 

12See Alaska R.R. Constr., FD 34658, slip op. at 

2. Prior to 2007, the Board did not use this standard 

when considering whether to issue a preliminary 

decision on the transportation merits in rail 

construction cases. See, e.g., Burlington N. & Santa 

Fe Ry.—Constr. & Operation Exemption—Merced 

Cnty., Cal., FD 34305 (STB served Mar. 28, 2003); 

San Jacinto Rail Constr. Exemption, FD 34079, slip 

op. at 7. 

13 In Texas Railway Exchange LLC—Construction 

& Operation Exemption—Galveston County, Tex., 

FD 36186 et al., slip op. at 2, 5 (STB served Jan. 

17, 2020), the Board denied as moot a request for 

a preliminary decision on the transportation merits 

because the Board was, in the same decision, 

granting the petition for exemption to construct and 

operate the new rail line. A request for preliminary 

decision on the transportation merits is currently 

pending in Brookhaven Rail LLC—Construction & 

Operation Exemption—in Suffolk County, N.Y., 

Docket No. FD 36398. 14A petition for reconsideration has since been 

filed in that docket. 

as part of a ‘‘huge development plan.’’ 

Ozark Mountain R.R., FD 32204, slip op 

at 2. The agency decided that it would 

be inappropriate to move forward 

without the financial information 

required in an application because of 

significant concerns that the applicant 

there would not be able to bring the 

project to fruition. Id. In Texas Central 

Railroad & Infrastructure, Inc., FD 

36025, slip op. at 13–15, the Board, in 

requiring an application, explained that 

significant questions had been raised 

surrounding the financial feasibility of 

that proposed passenger rail project, 

namely the potential increase in cost 

from over $10 billion to over $20 billion 

(with one estimate over $30 billion) and 

the funding sources to cover those 

increased costs. Indeed, in that case, the 

record included a letter from a Texas 

Central official indicating substantially 

higher project costs than those 

previously presented to the Board, see 

Texas Central, FD 36025, slip op. at 13 

& n.24, and this discrepancy was not 

adequately addressed. Moreover, the 

record indicated conflicting statements 

from individuals associated with Texas 

Central as to the extent of nonmarket 

funding sources.9 See id. at 14 n.27. 

Here, not only is the projected cost of 

the project far less than that of the 

projected cost of the Texas project, but, 

based on the record, it has not 

dramatically increased as in the Texas 

case.10 Although there is some 

uncertainty as to financing beyond the 

$27.9 million that the Coalition has 

already received from a Utah agency, 

the record does not, unlike the Texas 

case, include inconsistent statements 

from the petitioner as to the project’s 

costs or its target future funding or 

financing sources, including from 

nonmarket sources. 

In short, it is appropriate to consider 

the Coalition’s construction proposal 

under section 10502, and an application 

proceeding under section 10901 is not 

required here. 

Issuance of Preliminary Decision on the 

Transportation Merits 

As noted above, the Coalition requests 

that the Board issue a preliminary 

decision addressing the transportation 

aspects of the project in advance of 

completing its review of the 

environmental issues. The Coalition 

explains that streamlining the regulatory 

process by issuing a preliminary 

decision on the transportation-related 

issues would help hasten its recovery 

from the economic downturn stemming 

from the pandemic. (Pet. 26–27.) Both 

Argyle and the Center oppose the 

Coalition’s request. The Center argues 

that based on prior Board precedent a 

preliminary decision addressing the 

transportation merits requires a 

‘‘showing of some unique or compelling 

circumstances’’ and that the Coalition 

has made no such showing here. (Ctr. 

Reply 5–6.) The Center claims that the 

Coalition has failed to explain how 

addressing the transportation merits 

before completing the environmental 

review process and determining 

whether to allow construction to begin 

would increase efficiencies in the 

process, mitigate the economic impacts 

of the pandemic, or benefit the proposed 

rail line. (Id.) The Coalition responds 

that examining the project in the twostep approach would hasten its ability 

to secure financing for the line. 

(Rebuttal 14.) 

The Board has considered requests for 

preliminary decisions addressing the 

transportation merits of a project over 

the years.11 Although the Board 

indicated in 2007 that it would 

generally only issue a preliminary 

decision on the transportation merits of 

a construction proposal based on a 

showing of unique or compelling 

circumstances,12 the Board has only 

once since that time denied a request for 

a preliminary decision on the 

transportation merits, see Cal. HighSpeed Rail Auth., FD 35724 (Sub-No. 1), 

slip op. at 2 (STB served Dec. 4, 2013).13

The Board recently used the two-step 

process in a construction case. In that 

case, the applicant had received support 

from state and local entities, the 

transportation merits of the project were 

apparent, and there was no opposition 

to the request for preliminary decision 

or the exemption itself at that time. Ken 

Tenn Reg’l Rail Partners, FD 36328, slip 

op. at 3–4.14 Here, there is also strong 

support from state and local entities (in 

addition to the seven-county Coalition), 

and the transportation merits are 

convincing (as described below). While 

the Board acknowledges opposition to 

the project, the economic 

circumstances, exacerbated by the 

current pandemic, are compelling, and, 

under the circumstances, issuing a 

preliminary decision on the 

transportation merits will help ensure 

the development and continuation of a 

sound rail transportation system, foster 

sound economic conditions in 

transportation, and reduce barriers to 

entry. See 49 U.S.C. 10101(4), (5) (7). 

Therefore, the Board finds it appropriate 

to issue a preliminary decision on the 

transportation merits while the Board 

continues the environmental review of 

the proposed construction. 

Rail Transportation Analysis 

As noted above, the Board must 

exempt a proposed rail line construction 

when it finds that application of the 

provisions of section 10901 is not 

necessary to carry out the RTP and there 

is no danger of market power abuse. 

Based on the record, the Board 

preliminarily concludes that the 

proposed construction qualifies for an 

exemption under section 10502 from the 

prior approval requirements of section 

10901. 

First, regulation under section 10901 

is not necessary to carry out the RTP in 

this case. The record here shows that 

the proposed rail line would provide an 

alternative, more cost-effective method 

of transportation for shippers that are 

currently limited to shipping by truck. 

(Pet. 13–15.) The proposed line would 

provide shippers in the Basin the 

opportunity to enter markets they 

currently cannot access due to cost 

constraints and the ability to import 

materials into the Basin at a more 

economical cost. (Pet. 13–15; Coalition 

Reply 15–16, July 21, 2020.) 


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15Because regulation of the proposed 

construction and operation is not needed to protect 

shippers from the abuse of market power, the Board 

need not determine whether the transaction is 

limited in scope. 49 U.S.C. 10502(a)(2). 

Accordingly, the proposed line would 

enhance competition by providing 

shippers in the area with a freight rail 

option that does not currently exist and 

foster sound economic conditions in 

transportation, consistent with section 

10101(4) & (5). Additionally, consistent 

with sections 10101(2) and 10101(7), an 

exemption will minimize the need for 

federal regulatory control over the rail 

transportation system and reduce 

regulatory barriers to entry by 

minimizing the time and administrative 

expense associated with the 

construction and commencement of 

operations. (Pet. 21–22.) 

Argyle claims that the RTP goals at 

section 10101(8), concerning public 

safety, and section 10101(11), 

concerning safe working conditions, 

would be undermined by the project. 

(Argyle Reply 9, July 7, 2020.) Argyle 

asserts that there will be a substantial 

increase in local truck traffic if oil 

production were to increase to the 

extent claimed by the Coalition. (Id. at 

10.) Argyle also claims, among other 

things, that rail activities could trigger 

forest fires and notes that Argyle 

Canyon was heavily damaged by a fire 

in 2012. (Id.) The Board takes important 

concerns such as these seriously, and 

they will be examined as part of OEA’s 

environmental review and further 

examined by the Board in a subsequent 

decision considering the environmental 

impacts of the project. Cf. Brookhaven 

Rail—Constr. & Operation Exemption— 

in Suffolk Cnty., N.Y., FD 36398, et al., 

slip op. at 6 (STB served Oct. 23, 2020) 

(rejecting petition seeking exemption 

from 49 U.S.C. 10909 and noting 

concerns stemming from section 

10101(8), among others). 

Second, application of section 10901 

is not necessary to protect shippers from 

an abuse of market power.15 The 

proposed line would enhance 

transportation service to shippers by 

providing an opportunity to use rail 

service where none currently exists. 

Currently, the only transportation 

option available to freight shippers in 

the Uinta Basin is trucking along twolane highways. (Pet. 13.) The proposed 

line, when completed, would provide 

freight shippers in the Basin with rail 

service and access to the interstate rail 

network and would result in increased 

intermodal competition with 

commercial freight by truck. Therefore, 

the proposed line would increase 

competitive options to shippers and 

eliminate shippers’ reliance on one 

option for freight transportation. 

Environmental Review. 

As discussed above, the Board has 

preliminarily concluded that the 

proposed construction meets the 

statutory standards for exemption on the 

transportation merits, subject to 

completion of the ongoing 

environmental review. The Board’s 

Office of Environmental Analysis (OEA) 

issued a Final Scope of Study for the 

Environmental Impact Statement (EIS) 

on December 13, 2019, and a Draft EIS 

on October 30, 2020, for public review 

and comment. OEA also held six virtual 

public meetings to receive oral 

comments, the last of which took place 

on December 3, 2020. Following the 

conclusion of the comment period 

(January 28, 2021), OEA will issue a 

Final EIS addressing the public 

comments and environmental impacts 

and make its final recommendations to 

the Board. 

Following the conclusion of the 

environmental review process, the 

Board will issue a further decision 

assessing the potential environmental 

impacts of the proposal, weighing the 

potential environmental impacts and 

the transportation merits, and 

determining whether to make the 

exemption effective at that time, and if 

so, whether to include appropriate 

mitigation conditions. See Mo. Mining, 

Inc. v. ICC, 33 F.3d 980 (8th Cir. 1994). 

The decision issued today is a 

preliminary determination that does not 

prejudge the Board’s final decision, nor 

diminish the agency’s environmental 

review process concerning the proposed 

Line’s construction. See Ill. Com. 

Comm’n v. ICC, 848 F.2d 1246, 1259 

(DC Cir. 1988). Construction may not 

begin unless and until authorized by the 

Board in a final decision, which may 

impose environmental mitigation as 

appropriate, and until any such final 

decision has become effective. 

It is ordered: 

1. The Coalition’s July 21, 2020 

response and the late-filed replies and 

letters are accepted into the record. 

2. Under 49 U.S.C. 10502, the Board 

preliminarily exempts the construction 

and operation of the above-described 

line from the prior approval 

requirements of 49 U.S.C. 10901, subject 

to further consideration of the potential 

environmental impacts of the proposal. 

3. On completion of the 

environmental review, the Board will 

issue a further, final decision addressing 

any potential environmental impacts, 

weighing any environmental impacts 

with the transportation merits, and 

determining whether the exemption 

should become effective (subject to any 

appropriate mitigation conditions). 

Construction may not begin unless and 

until the Board issues a final decision 

authorizing the exemption and any such 

decision has become effective. 

4. Notice of this decision will be 

published in the Federal Register. 

5. Petitions for reconsideration must 

be filed by January 25, 2021. 

6. This decision is effective 30 days 

from the date of service. 

Decided: January 4, 2021. 

By the Board, Board Members 

Begeman, Fuchs, and Oberman. Board 

Member Oberman dissented with a 

separate expression. 

Board Member Oberman, dissenting: 

The Board majority has reached a 

preliminary conclusion that the 

transportation merits of the proposal of 

the Seven County Infrastructure 

Coalition (the Coalition) to construct 

and operate the approximately 85-mile 

line at issue (the project) in the Uinta 

Basin meet the statutory exemption 

standard under 49 U.S.C. 10502. The 

majority has reached this conclusion in 

a so-called two-step process, in which it 

has preliminarily addressed the 

transportation merits prior to 

considering the environmental impacts 

and any necessary mitigation 

requirements. 

I dissent from both aspects of this 

decision (Decision). I do not conclude 

that the Board should find, today, that 

an application is necessary here—only 

that the Board should not make a 

finding now that an application is not 

necessary and should not and cannot 

reach a conclusion on the transportation 

merits, even preliminarily, prior to 

completing the environmental review 

and resolving issues concerning the 

project’s financial viability. 

Introduction. Based on the instant 

record and publicly available 

information affecting the potential 

success of this project, as discussed 

below, serious questions have been 

raised about the transportation merits of 

the project, especially concerning the 

financial viability of the line. In 

addition, the Board’s Office of 

Environmental Analysis (OEA) has 

issued a Draft Environmental Impact 

Statement (Draft EIS) which concludes 

that the project ‘‘would result in 

significant environmental impacts.’’ 

(Draft EIS S–1.) Rather than finding 

today both that a petition for exemption 

is the appropriate procedure and 

preliminarily concluding that the 

statutory exemption standard has been 

met, the Board should seek additional 

information concerning the financial 

viability of and long-term need for this 


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1See, e.g., Alaska Railroad—Construction & 

Operation Exemption—Rail Line Between Eielson 

Air Force Base & Fort Greely, Alaska, FD 34658, slip 

op. at 2 (STB served Oct. 4, 2007). 

3Furthermore, to the extent the standard for 

issuance of a preliminary decision on the 

transportation merits requires a showing of unique 

or compelling circumstances, see Six County Ass’n 

of Governments—Construction & Operation 

Exemption—A Rail Line Between Levan & Salina, 

Utah, FD 34075, slip op. at 2 n.4 (STB served Sept. 

3, 2015); Alaska Railroad—Construction & 

Operation Exemption—Rail Line Between Eielson 

Air Force Base & Fort Greely, Alaska, FD 34658, slip 

op. at 2 (STB served Oct. 4, 2007), the Coalition has 

failed to make that showing. The Coalition cites 

only ‘‘the ongoing COVID–19 pandemic and its 

economic impacts’’ in support of its argument that 

there are unique or compelling circumstances here. 

(Pet. 26.) While the significant impacts the 

pandemic has had across the country and the world 

are self-evident, these impacts are also among the 

principal reasons that further inquiry into the 

financial viability of the project is necessary, as 

discussed, infra. 

4On December 21, 2020, a group of landowners 

filed a petition for reconsideration in that docket 

alleging, among other things, that the petitioner 

‘‘misrepresented to the Board that the Petition is 

unopposed.’’ Pet. for Recons. 2, Ken Tenn Reg’l Rail 

Partners, FD 36328. The petition for reconsideration 

is currently pending before the Board. 

5The Board only received a copy of this study 

because, in its opposition to the petition, the Center 

for Biological Diversity (Center) submitted a version 

of the study. But that version was redacted by the 

Coalition before it was made available to the Center. 

(See Ctr. Supp. 387–469.) 

6The Center and the Argyle Wilderness 

Preservation Alliance (Argyle) argue there is no 

evidence to support a claim of need for the line 

outside the oil industry. (Ctr. Reply 31 (noting that 

project in order to provide clarity on the 

uncertainties surrounding these two 

issues, and should allow the 

environmental review process to be 

completed before making these 

decisions. 

Given these uncertainties and the 

controversial nature of the project, the 

transportation merits cannot properly be 

determined without measuring them 

against whatever environmental 

degradation the project will cause. In 

this case, the Board should not deviate 

from precedent generally disfavoring 

such a two-step process.1 It is therefore 

premature for the Board to reach a 

preliminary conclusion on the 

transportation merits of this case, and it 

is equally premature for the Board to 

decide now that an application is not 

necessary. 

Application vs. Petition for 

Exemption. Under 49 U.S.C. 10502, the 

Board must exempt a proposed rail line 

construction from the application 

procedures at 49 U.S.C. 10901 when the 

Board finds that: (1) Those procedures 

are not necessary to carry out the rail 

transportation policy (RTP) of section 

10101; and (2) either (a) the proposal is 

of limited scope, or (b) the full 

application procedures are not 

necessary to protect shippers from an 

abuse of market power. E.g., Ken Tenn 

Reg’l Rail Partners—Constr. & 

Operation Exemption—in Fulton Cnty, 

Ky. & Obion Cnty., Tenn., FD 36328, slip 

op. at 3 (STB served Dec. 1, 2020); Tex. 

Cent. R.R. & Infrastructure, Inc—Pet. for 

Exemption—Passenger Rail Line 

Between Dallas & Houston, Tex. (Tex. 

Cent. R.R. June 2020), FD 36025, slip op. 

at 5 (STB served June 20, 2020). 

In considering a construction 

application under 49 U.S.C. 10901, the 

Board ‘‘shall’’ grant such an application 

‘‘unless the Board finds that such 

activities are inconsistent with the 

public convenience and necessity.’’ 49 

U.S.C. 10901(c); e.g., Ken Tenn Reg’l 

Rail Partners, FD 36328, slip op. at 3. 

When measuring the public 

convenience and necessity, the Board 

looks at ‘‘whether: (1) the applicant is 

financially able to undertake the project 

and provide rail service; (2) there is a 

public demand or need for the proposed 

service; and (3) the proposal is in the 

public interest and will not unduly 

harm existing services.’’ Tongue River 

R.R.—Constr. & Operation—W. 

Alignment, FD 30186 (Sub-No. 3) et al., 

slip op. at 13 (STB served Oct. 9, 2007). 

While the majority correctly states that 

Board precedent holds that there is a 

statutory presumption that construction 

projects should be approved, Decision 4, 

such a presumption does not obviate the 

Board’s statutory obligation to 

determine whether regulation is 

necessary to carry out the RTP of section 

10101, and if so, whether the project is 

consistent with the public convenience 

and necessity. 

As detailed below, there are more 

than enough unanswered questions 

about the financial viability of, and 

public need for, this project to raise the 

serious potential that, after the 

development of a complete record, the 

Board may find that regulation here is 

necessary to carry out the RTP of section 

10101, and that the presumption in 

favor of approving construction may 

well be overcome. 

In the past, the Board has rejected an 

exemption and required an application 

in construction cases presenting 

significant controversy, particularly 

where concerns have been raised about 

the project’s financial feasibility and its 

impact on the local area. See Tex. Cent. 

R.R. & Infrastructure, Inc—Pet. for 

Exemption—Passenger Rail Line 

Between Dallas & Houston, Tex. (Tex. 

Cent. R.R. July 2020), FD 36025, slip op. 

at 14 (STB served July 16, 2020) (‘‘[A]n 

application here would provide the 

Board with additional information 

pertaining to the financial condition of 

the applicant and financial feasibility of 

the project that would assist the Board 

in considering the transportation merits 

of the project.’’); Ozark Mountain R.R.— 

Construction Exemption, FD 32204, slip 

op. at 4–5 (ICC served Dec. 15, 1994) 

(revoking conditional exemption and 

requiring application due to 

‘‘[s]ignificant public opposition to the 

project’’ including concerns that the 

applicant ‘‘will be unable to construct 

and operate the proposed lines’’). 

Here, the majority declines to follow 

these precedents, see Decision 7, finding 

that a petition for exemption is 

appropriate, stating: ‘‘[t]here is nothing 

in the language of section 10502 to 

suggest that an exemption proceeding is 

inappropriate if the viability of the 

proposed rail line is questioned’’ 

because ‘‘the Board’s grant of authority 

to construct a line . . . is permissive, 

not mandatory.’’ Decision 5–6. Given 

the state of the instant record, I disagree 

with the majority’s decision finding, at 

this time, that a petition for exemption 

is appropriate. Rather than ignoring the 

public opposition and significant 

questions about the project’s financial 

feasibility, the state of the instant record 

requires the Board to seek additional 

information and clarify these important 

issues before concluding that the full 

application procedures are not 

necessary to carry out the RTP of section 

10101.2 

A two-step process involving 

preliminary approval. In particular, I 

find it inappropriate and ill-advised for 

the Board to undertake a two-step 

process here, reaching a preliminary 

conclusion on the transportation merits 

of the Coalition’s petition for exemption 

before the completion of the 

environmental review process. From the 

information currently in the record, the 

transportation merits of this project— 

discussed in detail below—are not clear. 

In addition, significant environmental 

issues have been raised. Though I have 

full faith in OEA to conduct a rigorous 

and thorough environmental analysis 

regardless of whether the Board reaches 

a preliminary conclusion on the 

transportation merits of the project, the 

Board should withhold judgment on the 

transportation merits until it also has 

the benefit of OEA’s environmental 

analysis.3

The instant case is easily 

distinguished from Ken Tenn Regional 

Rail Partners, FD 36328, cited by the 

majority. Decision 4, 8. In that case (in 

which I joined with the majority), the 

Board issued a preliminary decision on 


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4On December 21, 2020, a group of landowners 

filed a petition for reconsideration in that docket 

alleging, among other things, that the petitioner 

‘‘misrepresented to the Board that the Petition is 

unopposed.’’ Pet. for Recons. 2, Ken Tenn Reg’l Rail 

Partners, FD 36328. The petition for reconsideration 

is currently pending before the Board. 

5The Board only received a copy of this study 

because, in its opposition to the petition, the Center 

for Biological Diversity (Center) submitted a version 

of the study. But that version was redacted by the 

Coalition before it was made available to the Center. 

(See Ctr. Supp. 387–469.) 

6The Center and the Argyle Wilderness 

Preservation Alliance (Argyle) argue there is no 

evidence to support a claim of need for the line 

outside the oil industry. (Ctr. Reply 31 (noting that 

prior revenue forecasts for the project have not 

included products outside the oil industry); Argyle 

Reply 9, 12 & Appx. 1 at 2, July 7, 2020 (arguing 

in particular that there are no agricultural producers 

who would utilize the line).) The Draft EIS also 

points out that the volume of non-oil traffic is likely 

to be low, stating that ‘‘[t]he Coalition does not 

anticipate that the volume of other commodities 

would be large enough to warrant dedicated trains.’’ 

(Draft EIS 2–2.) 

7Surprisingly, the majority dismisses its own 

inability to examine the redacted material in the R.L 

Banks study, concluding, without explanation, that 

no additional financial information is needed. 

Decision 6 n.8. Since there is virtually no financial 

information in the record showing the viability of 

the project, apparently, the majority concludes that 

financial viability is unimportant. 

the transportation merits of a petition 

for exemption in a construction case. 

But the facts in Ken Tenn were 

significantly different from the instant 

case. There, on the record before the 

Board at the time,4 no financial or 

environmental concerns had been raised 

(though, as here, the environmental 

process is ongoing), and in fact it 

appeared there was no opposition at all 

to either the request for a preliminary 

exemption or the petition itself. Ken 

Tenn Reg’l Rail Partners, FD 36328, slip 

op. at 4. By contrast, here, though there 

is support from state and local entities 

(including that the Coalition itself is an 

independent political subdivision of the 

State of Utah, see Decision 2), there is 

also significant opposition, and that 

opposition has raised both financial and 

environmental concerns. I will discuss 

the transportation merits and the 

environmental concerns separately. 

Transportation merits. While the 

Coalition argues an exemption should 

be granted because ‘‘key economic 

activities in the Uinta Basin, including 

farming, ranching, oil and gas 

production, and mineral extraction, 

depend heavily on the transportation of 

goods and commodities in and out of 

the region,’’ (Pet. 12–13), there can be 

no doubt that the singular rationale for 

constructing the proposed railroad is to 

provide rail transportation to stimulate 

an increase in oil production in the 

Basin, (id. at 13–17). It is beyond 

contradiction that without the hoped-for 

increase in oil production, there is 

virtually no possibility the railroad 

would be financially viable. But reliance 

on future oil production to sustain the 

project, based on currently available 

information and the record before the 

Board, is problematic at best, as 

discussed below. 

In 2018, the Coalition commissioned 

a consultant, R.L. Banks & Associates, 

Inc. (R.L. Banks) to conduct a prefeasibility study for the project. 

However, in support of its petition, the 

Coalition failed to mention this study 

and never submitted it to the Board. I 

find this omission significant. Had the 

Banks study been persuasive in support 

of the project, one would have expected 

the Coalition to enthusiastically rely on 

it. 

The Coalition ultimately mentioned 

the existence of the R.L. Banks study in 

its reply only after it was submitted and 

referenced by the objectors in their 

replies to the Coalition’s petition.5 (See 

Coalition Reply 16 n.46 & 17 n.51, July 

21, 2020.) The inescapable conclusion 

from a review of the R.L. Banks study 

is that the project’s success relies 

entirely on an increase in oil production 

in the Uinta Basin, with that oil being 

shipped by rail; shipment of any other 

commodities on the railroad would be 

insignificant in comparison to oil. (See 

Pet. 15; id., V.S. McKee ¶ 17 (Executive 

Director of the Coalition stating the line 

‘‘will primarily be used to ship crude oil 

and fracking sand.’’).) Non-oil 

shipments could never justify the cost of 

constructing the project.6

But the R.L. Banks study hardly is 

persuasive on the likelihood that a 

projected increase in oil production will 

be large enough to sustain the railroad. 

First, the only version of the study 

obtainable by the Center is woefully 

incomplete. While R.L. Banks states that 

it undertook to make detailed 

projections of the demand for Uinta 

Basin oil and the number of carloads 

such demand would generate for the 

proposed railroad, the Coalition has 

redacted every statistic and every table 

in the R.L. Banks study released to the 

Center. Therefore, it is impossible for 

the Board (or anyone) to evaluate the 

substance and reliability of the 

conclusions purportedly reached by R.L. 

Banks concerning the projected volume 

of shipments on the line. If those 

statistics were persuasive of the 

transportation merits of the project, 

again, one would have expected the 

Coalition to supply them to the Board 

(which, if confidentiality was a concern, 

could have been submitted under seal 

subject to a protective order). The 

Coalition’s failure to do so supports an 

inference that the statistics compiled by 

R.L. Banks are either not persuasive or 

are no longer reliable.7

Aside from this shortcoming, even the 

R.L. Banks study acknowledges that the 

demand for the type of oil extracted 

from the Uinta Basin is unknown. (Ctr 

Supp. 417 (‘‘Unknown Demand—The 

demand for Uinta Basin’s waxy crude, 

which is not well known outside of 

Utah, in large part due to lack of 

transportation infrastructure to ship 

product out of the Uinta Basin, may not 

be as readily accepted as initial 

indications would suggest.’’).) More 

importantly, since the preparation of the 

R.L. Banks study in 2018, the global 

demand for oil has changed 

dramatically, both because of the 

pandemic and its long term 

ramifications, and because of the 

changing progress in the world’s 

reliance on non-fossil fuel energy. 

As a result, there are significant 

questions about the future global 

demand for oil, which would affect the 

financial viability of a rail line built 

primarily to move Uinta Basin oil, the 

demand for which was unknown even 

prior to the pandemic. Further, while 

the Coalition assumes the pandemicrelated changes may be short-term (Pet. 

10 n.28, 14 n.52), there are significant 

indications that this assumption may be 

unwarranted. 

These questions of future global 

demand were recently summarized by 

former Vice President Al Gore: 

As a former oil minister in Saudi Arabia 

put it 20 years ago, ‘‘the Stone Age came to 

an end, not because we had a lack of stones, 

and the oil age will come to an end not 

because we have a lack of oil.’’ Many global 

investors have reached the same conclusion 

and are beginning to shift capital away from 

climate-destroying businesses to sustainable 

solutions. . . . [S]ome of the world’s largest 

investment firms are now joining this 

movement, too, having belatedly recognized 

that fossil fuels have been extremely poor 

investments for a long while. Thirty asset 

managers overseeing $9 trillion announced 

on [December 11, 2020] an agreement to align 

their portfolios with net-zero emissions by 

2050. 

Al Gore, Opinion, Al Gore: Where I Find 

Hope, New York Times (Dec. 13, 2020), 

https://www.nytimes.com/2020/12/12/ 

opinion/sunday/biden-climate-changeal-gore.html. 

Indeed, many of the world’s major oil 

producers have written down the value 

of their oil reserves—including shale oil 

reserves—by multi-billions of dollars 

since the middle of 2020. These writedowns have been based on longer term 

projections, only partly resulting from 

pandemic fallout: 


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8Further, as Argyle points out, changes in the 

foreign and domestic oil markets ‘‘recently resulted 

in a negative value of crude oil for the first time 

in history.’’ (Argyle Reply 8, July 7, 2020.) 

9The R.L. Banks study looked at, among other 

commodities, crude oil and shale oil production in 

the Basin to estimate potential traffic volumes. 

While the study includes some unredacted 

information about the estimated production of 

crude oil, (Ctr. Supp. 419–421 (estimating annual 

crude oil production in the Basin to be between 

225,000 barrels per day and 350,000 barrels per 

day)), the actual data relating to potential shale oil 

traffic volumes is all redacted, (Ctr. Supp 423). 

10A further challenge to the Coalition’s 

assumptions about oil demand is the concern that 

office commuters, significant users of petroleum 

products either through mass transit or automobile 

travel, may never return to commuting at prepandemic levels. See, e.g., Paul Wiseman and 

Alexandra Olson, Shift in Economic Landscape, 

Chicago Tribune, Dec. 26, 2020, at 7 (‘‘A McKinsey 

survey of 800 corporate executives worldwide 

found that 38% expect their employees now 

working remotely to continue to do so at least two 

days a week after the pandemic, up from 22% in 

surveys before the pandemic.’’). 

11The R.L. Banks study states that, in 2018, 

experts expected domestic oil production to grow 

at record pace, and that it was expected that 

‘‘worldwide demand for oil also will continue to 

grow over the next five years and the United States 

will supply most of the production to answer that 

growing demand.’’ (Ctr. Supp. 392.) The study, of 

course, could not have anticipated the current 

pandemic and the related drastic change in the 

global oil markets, as reflected in 2020 by the writedowns undertaken by the world’s major oil 

producers. 

12But see, Tex. Cent. R.R. July 2020, FD 36025, 

slip op. at 13–15. In that case, the Board chose not 

to rely on the financial marketplace to decide the 

viability of the project, instead rejecting a petition 

and requiring an application due to the financial 

feasibility concerns raised by commenters. Though 

the projected cost estimates in that case were higher 

than in this case, the cost of the project here is 

greater than a billion dollars, (Pet. 11), and, as 

discussed herein, there is significant uncertainty 

about the financial viability of a project of that 

magnitude. 

BP PLC, Hess Corp. and Occidental 

Petroleum Corp., have recently taken 

multibillion-dollar [asset] impairments as a 

coronavirus-induced economic slowdown 

adds pressure to an already struggling shale 

sector. Chevron Corp. took a $10 billion 

write-down in December, [2019] and Royal 

Dutch Shell PLC said Tuesday that it would 

write down the value of its assets by up to 

$22 billion because of lower energy 

prices. . . . 

The U.S. shale industry has written down 

more than $450 billion in assets since 2010, 

according to a June [2020] report by Deloitte, 

reassessing holdings amid a global supply 

glut and growing investor concerns about the 

long-term future of fossil fuels. The 

accounting firm projects additional shale 

impairments of as much as $300 billion in 

coming months as the coronavirus holds 

down commodity prices. 

Christopher M. Matthews, Exxon Mobil 

Resists Write-Downs as Oil, Gas Prices 

Plummet, Wall Street Journal (June 30, 

2020), https://www.wsj.com/articles/ 

exxon-mobil-resists-write-downs-as-oilgas-prices-plummet-11593521685 

(emphasis added); see also Christopher 

M. Matthews, Exxon Slashes Spending, 

Writes Down Assets, Wall Street Journal 

(Nov. 30, 2020), https://www.wsj.com/ 

articles/exxon-slashes-spending-writesdown-assets-11606774099 (‘‘Exxon cut 

its expectations for future oil prices for 

each of the next seven years by 11% to 

17% . . . . The sizable reduction 

suggests Exxon expects the economic 

fallout from the pandemic to linger for 

much of the next decade.’’).8

To be clear, owners of oil assets 

generally distinguish between the 

amount of their ‘‘proven reserves’’ and 

all other reserves. The term ‘‘proven 

reserves’’ refers to the quantity of oil 

which can be extracted profitably at the 

prevailing price for that oil. Thus, if the 

price of oil drops below the cost of 

extraction, then the amount of ‘‘proven 

reserves’’ must be reduced accordingly. 

Here, questions have been raised about 

the quantity of oil reserves in the Basin, 

the demand for the specific type of oil 

found there, and whether there are 

sufficient proven reserves to provide 

long term business for the proposed 

railroad. Estimates in the record of the 

amount of oil in the Basin vary, in part 

depending on whether unconventional 

resources such as oil produced from oil 

shale are included in the estimate.9 (Ctr. 

Reply 23–24 (estimating 401 million 

barrels of ‘‘proven’’ conventional 

reserves across the state of Utah at the 

end of 2018, or only approximately five 

years’ worth); Ctr. Supp 392 (R.L. Banks 

study estimating ‘‘between 50–321 

billion barrels’’ without further 

description of type).) While the highend estimates here would support the 

prospect of a booming oil business in 

the Basin if the demand exists, the lowend estimates would not—and there is 

little information in the record that 

would enable the Board to determine 

even a range of what might be realistic. 

Given the depression in the oil market 

since the R.L. Banks study in 2018, 

there is no basis in the present record 

for the Board to determine the amount 

of ‘‘proven reserves’’ in the Uinta Basin. 

But surely, if in 2020, the world’s major 

oil producers have been forced to 

undertake major write-downs of the 

value of their oil reserves and lower 

their expectations for the future of oil 

prices, as discussed above, it is difficult 

to imagine that the Uinta Basin 

producers have not been required to do 

the same, especially in view of the R.L. 

Banks study’s concession that the 

demand for Uinta Basin’s waxy crude is 

‘‘unknown’’ and ‘‘may not be as readily 

accepted as initial indications would 

suggest,’’ (Ctr. Supp. 417). 

If, as the foregoing sources suggest, 

the global demand for oil is indeed 

depressed and does not bounce back to 

pre-pandemic levels as quickly as the 

Coalition assumes 10—or never 

rebounds entirely—the viability of the 

Uinta Basin railroad is clearly thrown 

into question. Understandably, even the 

R.L. Banks study caveats its traffic 

volume forecasts, stating that ‘‘[t]he 

viability of the [project] is grounded on 

the assumption that oil markets will be 

stable or favorable . . . . However, a 

significant and long-term downturn in 

the price of [West Texas Intermediate 

crude oil], particularly in the early years 

of the prospective railroad, could result 

in significant shortfalls from the 

performance indicated herein.’’ (Ctr. 

Supp. 416.) It takes no great insight to 

observe that the oil markets have been 

anything but stable or favorable, thus 

leaving R.L Banks’ ‘‘assumption’’ at best 

questionable.11

The majority did not explore these 

significant changes in the global oil 

market and dismisses concerns raised 

by the Center and Argyle about the 

financial viability of the project, finding 

that, because the Board’s authority is 

permissive, ‘‘the ultimate decision to go 

forward with an approved project is in 

the hands of the applicant and the 

financial marketplace,’’ and thus the 

Board need not consider such 

concerns.12 Decision 6. 

Even if relying on the financial 

marketplace to determine whether this 

railroad should be built constituted a 

sufficient discharge of the Board’s 

duties in determining whether a project 

should be granted an exemption from 

the full application process, here the 

record establishes that the financial 

marketplace cannot be relied on. The 

R.L. Banks feasibility study makes clear 

that the private sector will not build this 

railroad; only a government can afford 

to build it: 

[R.L. Banks] assumed that construction of 

the railroad would be the responsibility of 

[the Coalition], another public entity, or a 

consortium of public entities. While private/ 

public partnerships (‘‘3Ps’’) are not 

unprecedented in the freight rail industry, 

there has never been such a partnership 

approaching the size and scope of the 

[project]. Furthermore, given the generally 

conservative nature of the rail freight 

industry, [R.L. Banks] believes any railroad 

which may eventually service the line has 

relatively little incentive to invest in the 

construction of the line, especially given the 

high associated capital costs projected and 

lack of current production levels sufficient to 

justify construction. 

(Ctr. Supp 433 (emphasis added).) 

Further, R.L. Banks made clear that the 

railroad financing could only be 

obtained through the issuance of 

government bonds: 


tkelley on DSKBCP9HB2PROD with NOTICES
1572 Federal Register / Vol. 86, No. 5 / Friday, January 8, 2021 / Notices 

13 (Ctr. Reply 12; Ctr. Supp. 229 (Drexel Hamilton 

Infrastructure Partners LP (DHIP) Request for 

Information Response for the Commercialization, 

Financing, Construction, Operation, and 

Maintenance of the Uinta Basin Railway by the 

Seven Counties Infrastructure Coalition of Utah, 

dated Apr. 11, 2019); Ctr. Supp. 351 (Memorandum 

of Understanding Regarding the Development of the 

Uinta Basin Railway between the Coalition and 

DHIP, dated May 10, 2019).) 

14Argyle notes that the Coalition claims crude oil 

production will increase by 400%, which, Argyle 

argues, ‘‘would cause a corresponding increase in 

local truck traffic between the oilwell sites and the 

rail loading points.’’ (Argyle Reply 10.) An increase 

in truck traffic in the Basin would have its own 

environmental and congestion-related impacts on 

the limited road infrastructure in the Basin. 

15Though the majority states that it will weigh 

the environmental impacts and the transportation 

merits of the project following the conclusion of the 

environmental review process, Decision 10, a 

preliminary decision on the transportation merits in 

this case gives the merits of the project an 

endorsement that may well not be warranted. 

Given the large capital investment required 

to construct the [project] . . . , [R.L. Banks] 

assumed that construction of the railroad 

would be financed through the issuing of 

bonds. Specifically, [R.L. Banks] assumed 

that the entire cost to construct the [project] 

would be financed with capital generated 

from issuing 30-year bonds. 

(Id. at 444.) 

While the record (as submitted, not by 

the Coalition, but by the objectors) refers 

to the possibility that the railroad 

construction will be financed by 

‘‘municipal conduit bonds,’’ 13 there is 

no indication of how such financing 

would be structured. Given the 

uncertainty of demand for Uinta Basin 

oil, as discussed above, there is every 

possibility that such bonds could only 

be sold if they were backed not only by 

revenues from the railroad, but also by 

local tax dollars. As former Vice 

President Gore observed, the world’s 

largest investment firms are withholding 

investments in fossil fuels and, if that is 

true, it appears highly unlikely that 

private investors can be found to invest 

in construction of a railroad dependent 

on harvesting oil of the type found in 

the Basin, in light of all of the 

information unknown from this record. 

Thus, the private financial marketplace 

is not likely to be a determinant of the 

financial feasibility of the railroad and 

should not be relied on by the Board to 

evaluate whether to grant a petition or 

approve an application for this project. 

On the contrary, the availability of 

public funding or public guarantees is 

likely to be the determinant. 

Adding to the uncertainty at this time 

is the fact that the Coalition has decided 

to rely on a private investment partner 

to develop the financing. The Coalition 

is partnering with DHIP, (Pet. 6, 37–38), 

which it describes as ‘‘an established 

independent infrastructure investment 

company that is successfully developing 

and financing projects across the United 

States. . . , ’’ (Coalition Reply 12, July 

21, 2020). Nevertheless, now known as 

DHIP Group, the company appears to be 

a small, young firm. Its website reflects 

that it consists of two managing 

partners, and the firm lists no prior 

experience in financing the construction 

of railroads. Home—DHIP Group, http:// 

dhipgroup.com/ (last visited Jan. 4, 

2021). The firm’s website also lists only 

one other infrastructure project in 

which it has been involved. 

Infrastructure—DHIP Group, http://

dhipgroup.com/infrastructure/ (last 

visited Jan. 4, 2021). While DHIP Group 

may, in fact, be well qualified to carry 

out this project, given all of the above 

serious concerns with the future of the 

oil market, the Board should insist on 

further information from DHIP Group on 

the practicality of obtaining the 

necessary financial resources to 

complete the project. 

In sum, the current record before the 

Board is woefully inadequate to permit 

the Board to evaluate and judge whether 

an exemption is warranted under the 

RTP or whether an application should 

be required so that the Board can 

determine whether the public 

convenience and necessity are met for 

the construction of the Uinta Basin 

railroad. 

Environmental review. As noted 

above, OEA concludes in the Draft EIS 

that the project ‘‘would result in 

significant environmental impacts.’’ 

(Draft EIS S–1; id. 1–1.) OEA also 

preliminarily concludes there could be 

major ‘‘significant and adverse impacts’’ 

as a result of the project on: Water 

resources; special status species 

(including several threatened and 

endangered plant species and a bird 

species managed by the Bureau of Land 

Management and the State of Utah); 

wayside noise (train noise adjacent to a 

rail line other than that from a 

locomotive horn); land use and 

recreation on public, private, and tribal 

lands; socioeconomics, including 

beneficial impacts like the creation of 

jobs, and adverse impacts like the 

displacement of structures on private 

land and the severance of properties; 

and issues of tribal concern affecting the 

Ute Indian Tribe of the Uintah and 

Ouray Reservation, including impacts 

related to vehicle safety and delay, rail 

operations safety, biological resources, 

air emissions,14 and cultural resources. 

(Draft EIS S–7 to S–9.) Mitigation 

measures could reduce but not 

eliminate these impacts, and the route 

recommended by OEA, the Whitmore 

Park Alternative, ‘‘would result in the 

fewest significant impacts on the 

environment,’’ (Draft EIS 2–47), 

compared to other alternative routes. In 

addition to these major impacts, OEA 

also enumerates several minor impacts 

in the Draft EIS, which OEA states can 

be mitigated if the recommended 

mitigation measures are adopted by the 

Board, as well as downline and 

cumulative impacts. (Draft EIS S–9 to S– 

12.) OEA states the Coalition has 

proposed 56 voluntary mitigation 

measures to address the environmental 

impacts of the project, and OEA 

preliminarily recommends an additional 

73 mitigation measures for the project. 

(Draft EIS S–23; see also Draft EIS ch. 

4, Mitigation.) 

Both Argyle and the Center argue 

against the Board’s reaching a 

preliminary conclusion on the 

Coalition’s petition before the 

environmental review process is 

complete. The Center states that 

‘‘development of the railway raises 

many significant environmental and 

socioeconomic issues, which must be 

weighed[,] along with the project’s 

financial risks, against its highly 

speculative benefits.’’ (Ctr. Reply 33; see 

also Argyle Reply 14, July 7, 2020.) 

The Draft EIS clearly illustrates there 

are serious environmental impacts that 

must be mitigated if the project is to 

proceed. What remains to be determined 

is whether the mitigation measures 

identified through the environmental 

review process will be sufficient to 

address these impacts, or whether the 

overall environmental impact of the 

project will outweigh the project’s 

transportation merits which, as 

discussed above, are at this time, at best, 

uncertain. The likely significant cost of 

any imposed mitigation measures may 

also affect the project’s financial 

viability. The transportation merits and 

the environmental impacts of this 

project are inherently interrelated and 

should be considered in balance with 

each other, rather than even 

preliminarily dealing with the 

transportation merits now. See Alaska 

R.R.—Constr. & Operation Exemption— 

A Rail Line Extension to Port 

MacKenzie, Alaska, FD 35095, slip op. 

at 22 (STB served Nov. 21, 2011) 

(Commissioner Mulvey, dissenting) 

(‘‘[T]he more severe the environmental 

impacts, particularly those that cannot 

be fully mitigated, the greater burden on 

the proponent of the rail line to show 

that the transportation merits of its 

proposal outweigh those impacts.’’).15

Conclusion. Contrary to the majority’s 

conclusions, the Board is mistaken 

when it reaches a conclusion, 

preliminarily and via the petition for 


tkelley on DSKBCP9HB2PROD with NOTICES
Federal Register / Vol. 86, No. 5 / Friday, January 8, 2021 / Notices 1573 

1 Given the ongoing nature of the coronavirus 

disease 2019 (COVID–19) public health emergency, 

FRA considers the FRA Administrator’s March 13, 

2020, emergency declaration in docket number 

FRA–2020–0002 to be in effect until it is 

specifically rescinded by the Administrator. See 

https://www.regulations.gov/document?D=FRA2020-0002-0002. However, any new requests for 

relief related to COVID–19 should be submitted to 

the 2021 ERD (FRA–2021–0001). 

exemption process, on the 

transportation merits of a project 

presenting serious questions like those 

raised here without more thoroughly 

evaluating those issues. The record in 

this proceeding on the overall financial 

viability of the project is significantly 

underdeveloped. Neither I nor the Board 

majority should be required to rely on 

reports in the media, which I have 

highlighted above, or on feasibility 

studies with all relevant data redacted, 

to make such an important decision on 

whether to approve construction of a 

rail line costing over a billion dollars 

through an environmentally sensitive 

area. 

Rather than determining at this time 

that the Coalition’s petition is ripe for 

decision, even preliminarily and 

piecemeal, the Board should require the 

Coalition to submit a complete and 

unredacted version of the R.L. Banks 

study, should insist that the Coalition 

elaborate on the projected demand for 

Uinta Basin oil in light of the global oil 

demand issues that have arisen since 

that study was completed, as discussed 

above, and should obtain more detail 

from the Coalition and DHIP Group on 

the reality of obtaining the necessary 

financing for the project, with or 

without obligating public funds, along 

with considering further input on these 

issues from the objectors. 

I therefore find it premature for the 

Board to issue the decision the majority 

issues today. Though the Decision states 

that it ‘‘does not prejudge the Board’s 

final decision, nor diminish the 

agency’s environmental review process 

concerning the proposed line’s 

construction,’’ Decision 10, 

nevertheless, the far more prudent 

course of action for the Board here 

would be to defer any decision on 

whether an exemption is warranted and 

on the overall transportation merits 

until the environmental review process 

is complete and until the Coalition 

submits more persuasive evidence on 

the financial viability of the entire 

project. 

I respectfully dissent. 

Jeffrey Herzig, 

Clearance Clerk. 

[FR Doc. 2021–00175 Filed 1–7–21; 8:45 am] 

BILLING CODE 4915–01–P 

DEPARTMENT OF TRANSPORTATION 

Federal Railroad Administration 

[Docket No. FRA–2021–0001] 

Establishment of an Emergency Relief 

Docket for Calendar Year 2021 

AGENCY: Federal Railroad 

Administration (FRA), Department of 

Transportation (DOT). 

ACTION: Notice of establishment of 

public docket. 

SUMMARY: This Notice announces the 

establishment of FRA’s emergency relief 

docket (ERD) for calendar year 2021. 

The designated ERD for calendar year 

2021 is docket number FRA–2021–0001. 

ADDRESSES: See SUPPLEMENTARY

INFORMATION section for further 

information regarding submitting 

petitions and/or comments to docket 

number FRA–2021–0001. 

SUPPLEMENTARY INFORMATION: On May 

19, 2009, FRA published a direct final 

rule establishing ERDs and the 

procedures for handling petitions for 

emergency waivers of safety rules, 

regulations, or standards during an 

emergency situation or event. 74 FR 

23329. That direct final rule became 

effective on July 20, 2009 and made 

minor modifications to 49 CFR 211.45 

in FRA’s Rules of Practice in 49 CFR 

part 211. Section 211.45(b) provides that 

each calendar year FRA will establish 

an ERD in the publicly accessible DOT 

docket system (available at 

www.regulations.gov). Section 211.45(b) 

further provides that FRA will publish 

a notice in the Federal Register 

identifying by docket number the ERD 

for that year. FRA established the ERD 

and emergency waiver procedures to 

provide an expedited process for FRA to 

address the needs of the public and the 

railroad industry during emergency 

situations or events. This Notice 

announces the designated ERD for 

calendar year 2021 is docket number 

FRA–2021–0001. 

As detailed in § 211.45, if the FRA 

Administrator determines an emergency 

event as defined in 49 CFR 211.45(a) has 

occurred, or that an imminent threat of 

such an emergency occurring exists, and 

public safety would benefit from 

providing the railroad industry with 

operational relief, the emergency waiver 

procedures of 49 CFR 211.45 will go 

into effect.1 In such an event, the FRA 

Administrator will issue a statement in 

the ERD indicating the emergency 

waiver procedures are in effect and FRA 

will make every effort to post the 

statement on its website at 

railroads.dot.gov. Any party desiring 

relief from FRA regulatory requirements 

as a result of the emergency should 

submit a petition for emergency waiver 

under 49 CFR 211.45(e) and (f). Specific 

instructions for filing petitions for 

emergency waivers under 49 CFR 

211.45 are found at 49 CFR 211.45(f). 

Specific instructions for filing 

comments in response to petitions for 

emergency waivers are at 49 CFR 

211.45(h). 

Privacy 

Anyone can search the electronic 

form of any written communications 

and comments received into any of our 

dockets by the name of the individual 

submitting the comment (or signing the 

document, if submitted on behalf of an 

association, business, labor union, etc.). 

Under 5 U.S.C. 553(c), DOT solicits 

comments from the public to better 

inform its processes. DOT posts these 

comments, without edit, including any 

personal information the commenter 

provides, to www.regulations.gov, as 

described in the system of records 

notice (DOT/ALL–14 FDMS), which can 

be reviewed at www.transportation.gov/ 

privacy. See also www.regulations.gov/ 

privacyNotice for the privacy notice of 

regulations.gov. 

Issued in Washington, DC. 

John Karl Alexy, 

Associate Administrator for Railroad Safety 

Chief Safety Officer. 

[FR Doc. 2021–00142 Filed 1–7–21; 8:45 am] 

BILLING CODE 4910–06–P 

DEPARTMENT OF TRANSPORTATION 

Federal Railroad Administration 

[Docket No. FRA–1999–6439, Notice No. 27] 

Adjustment of Nationwide Significant 

Risk Threshold 

AGENCY: Federal Railroad 

Administration (FRA), Department of 

Transportation (DOT). 

ACTION: Notice of adjustment of 

Nationwide Significant Risk Threshold. 

SUMMARY: FRA is updating the 

Nationwide Significant Risk Threshold 

(NSRT) for purposes of FRA’s regulation 

on the Use of Locomotive Horns at 

Public Highway-Rail Grade Crossings. 

This action is needed to ensure the 


tkelley on DSKBCP9HB2PROD with NOTICES