A Proposed Utah Railway Could Quadruple Oil Production in the Uinta Basin, if Colorado Communities Don’t Derail the Project

Utah’s Uinta Basin has long been a place of economic booms and busts thanks to the region’s reliance on the oil and gas industry. Keith Heaton thinks that could change with the construction of a new rail line in the area that could drive a quadrupling of the region’s crude oil production to upwards of 350,000 barrels per day when it connects with the national rail network that delivers to refineries on the Gulf Coast

The railway has been in the works since the 2014 formation of Utah’s Seven County Infrastructure Coalition, where Heaton is the executive director, which is working with the Rio Grande Pacific Corporation and Drexel Hamilton Infrastructure Partners—the DHIP Group. It has long faced opposition from local environmental groups critical of the increase in greenhouse gas emissions resulting from burning the oil and the risk of a derailment and spill into the Colorado River. 

That resistance is gaining steam. Over a dozen Colorado counties, municipalities and water agencies have expressed their opposition to the railway since last year, and the East Palestine train derailment, chemical spill and fire last month in Ohio has brought fresh awareness to the environmental risks of transporting hazardous materials. Colorado’s U.S. Sen. Michael Bennet and Rep. Joe Neguse have called on the federal agency with the final say on approving of the project to block its construction. Sen. John Hickenlooper, Bennet and Neguse, all three Democrats, have also asked the Department of Transportation not to issue over $2 billion in tax-exempt private activity bonds to finance it.

The Uinta Basin Railway would connect the oil fields of northeastern Utah to the national rail network running directly alongside the Colorado River for more than 100 miles as it makes its way to refineries on the Gulf Coast. The Surface Transportation Board approved the railway in 2021 and the U.S. Forest Service issued provisional approval for it to run through a 12-mile area of the Ashley National Forest in 2022. 

“Opening that up to the Intercontinental railroad system would allow a much broader economy and open it up to free trade across America, and the whole world for that matter,” Heaton said. “It’s very important for the locals who are trying to eke out a living there that they have access to markets.”

No formal contracts have been signed with oil producers yet, but deals are close to being finalized, said Mark Michel, president of the railway, and a managing partner of DHIP Group. 

A Legacy of Air Pollution From Fossil Fuel Production

Oil and gas production has already given the Uinta Basin some of the worst air pollution in the state, increasing opposition to the project.

“The whole idea of this is just absolutely unconscionable,” said Dr. Brian Moench, president of the Utah Physicians for a Healthy Environment. “It’s unconscionable greed, denial and a dismissal of reality.”

A 2014 study from the University of Colorado, Boulder, found that emissions in the Uinta Basin of volatile organic compounds—which can cause serious health consequences like cancer in people who breathe them—were equivalent to the annual VOC emissions of 100 million cars during the winter. 

Another study from researchers at the University of Utah published in 2021 found that despite decreasing methane emissions due to falling natural gas production in the Uinta Basin, oil and gas wells within the region were experiencing far higher rates of methane leaks compared to the national average. Methane is a potent greenhouse gas that is 81 times more effective at warming the planet than carbon dioxide over a 20-year period after being leaked into the atmosphere. 

Seth Lyman, director of Utah State University’s Bingham Entrepreneurship and Energy Research Center, located in Vernal, who was part of the study, said that since that research was published, oil and gas production has gone back up. 

In the winter, the Uinta Basin experiences high ozone levels due to inversion conditions in which a layer of warm air acts as a lid to trap cold air, and pollution, at ground level. 

The impact of the region’s air quality on its residents has long been debated. In 2013, a nurse midwife in Vernal, the main town within the basin, contacted Utah Physicians for a Healthy Environment about the rising number of infant deaths, Moench said. A review of health department data showed more such deaths in the Uinta Basin than the national average in 2013, but the study found it was not statistically significant, leading Lyman to discount the idea that Vernal or the Uinta Basin is a hotspot for infant deaths

But air quality can have significant impacts on human health, and quadrupling oil production in the region, Moench and Lyman agreed, would only make the air pollution worse. 

“We can expect that new production is going to have new emissions and that’s going to be part of the air quality picture here,” Lyman said. “There’s no reason to think otherwise.”

Local Benefits But Hazards Across the State Line

The economic development driven by the rail line won’t be just from the additional oil production it will spur, Michel and Heaton said, as it will allow other industries to ship their products in and out of the area, which currently has only a two-lane highway traveling to it through the mountains.

The environmental risks of the project are overblown, they said. The Uinta Basin produces waxy crude oil, which is solid at temperatures below 110 degrees Fahrenheit, Michel said, so if it spills it would be easier to clean up, something the Surface Transportation Board also found in its final Environmental Impact Statement for the project. Steam coils in the train cars heat the oil once it has reached its destination to ease its removal, Michel said.

Heaton said the coalition is concerned with sustainability, but oil and gas will continue to be important for the energy sector for years to come. If oil isn’t produced from the Uinta Basin, he said, it will be produced somewhere else where there are fewer regulations and less advanced technologies.

The board’s EIS, however, is being challenged as inadequate in court by environmental groups and Eagle County, Colorado. 

The Surface Transportation Board’s EIS failed to consider the impact the project would have on climate change, the Biden administration’s climate goals and the increased likelihood of derailments from the swelling volume of trains, Eagle County Commissioner Matt Scherr said. 

Colorado is already seeing the consequences of climate change with more intense wildfires and flooding. The production of more oil, Scherr said, will only make the extreme weather patterns worse. 

Glenwood Springs, one of the cities supporting Eagle County’s lawsuit, has seen how climate change can impact a community. When the Grizzly Creek Fire tore through nearby Glenwood Canyon in 2020, Mayor Jonathan Godes said, it cost them millions of dollars in lost economic opportunities and damages to the community.

“Rockfall. Debris slides. Wildfire,” he said. “This is what happens in Glenwood Canyon.” Burning more fossil fuels will worsen those impacts, he said. 

Scherr said the Norfolk Southern train derailment in East Palestine, where volatile chemicals spilled from 38 of the 141 train cars, is an example of the risks a derailment can have. Responders had to burn off the chemicals to avoid an explosion. Residents—who reported headaches and nausea after the crash—were temporarily ordered to leave their homes. More than 40,000 fish died after the chemicals spilled into local waterways. 

The Uinta Basin Railway may transport a waxy crude that is solid, Scherr said, but “I don’t think any of us is really going to know what that means until [an accident] happens, and we’re not really excited to wait and be the guinea pigs for that.” An oil spill into the Colorado River, which supplies 40 million people with water and is already experiencing 20 years of drought, could be “catastrophic,” he said.

To Godes, the railway’s supporters claim that the waxy crude will be easier to clean up is “somewhere between willful ignorance and an outright lie.”

“To claim it’s as simple as picking up candlesticks is laughable and sad at the same time,” he said.

Michel said environmentalists should actually support the project. The oil, he said, is likely to be used in lubricants, plastics and cosmetics, rather than as a fuel, and a railway in the basin will reduce the number of trucks transporting the crude, resulting in less fuel being burned and reducing the air pollution in the region.

The railway will do nothing, however, to decrease the methane and VOC emissions studies have documented from drilling in the region, which would likely grow with the increased production. 

“The only beneficiaries of this are people associated with the fossil fuel industry and those few private businesses in the Uinta Basin,” said Deeda Seed, a public lands senior campaigner for the Center for Biological Diversity,

This month, nearly two dozen people, including Moench and Seed, spoke against the railway at a Seven County Infrastructure Coalition hearing. They cited concerns over the rising cost of the railway, the impact it would have on climate change and the risk of wildfires and oil spills from a derailment. 

Nonetheless, after they spoke, the coalition voted unanimously to support Uinta Basin Railway seeking $2 billion in tax-exempt private activity bonds from the Department of Transportation to help finance the project.

The bonds would cover about 70 percent of the project, which would cost around $2.9 billion—about double what it was expected to cost four years ago—and come with low-interest rates intended to facilitate the construction of infrastructure projects that benefit the public.

But producing more oil, Scherr said, is not a public good. “If investors don’t see it as a worthwhile project,” he asked, “why should taxpayers give them that?”

“These bonds basically amount to a public subsidy for the oil and gas industry,” Moench said. 

The bonds, however, are just one option for getting the financing needed for the project, said Michel with Uinta Basin Railway. “We’re gonna get this done with or without the bonds,” he said.