Supreme Court rules in favor of Utah crude oil railway

The Surface Transportation Board’s environmental review of the proposed Uinta Basin Railway was proper, the U.S. Supreme Court ruled Thursday in an 8-0 decision that overturns a lower court’s order that blocked construction of the 88-mile Utah railroad.

The STB in December 2021 approved the project, noting that the transportation merits of the rail line outweighed its potential environmental impacts. The line would be used to transport waxy crude oil from the remote Uinta Basin to a connection with Union Pacific’s former Rio Grande main line. From there the crude would be hauled to Gulf Coast refineries.

Eagle County, Colorado, and several environmental groups subsequently filed suit against the STB and the Seven County Infrastructure Coalition, the Utah group seeking to build the railway.

The U.S. Court of Appeals for the District of Columbia ruled in 2023 that the STB’s 3,600-page environmental review did not consider the railroad’s broader impacts, including increased drilling in the Uinta Basin and refining the oil the railroad would haul. The decision vacated the STB’s environmental impact statement and its order approving construction.

But the Supreme Court said Thursday that the STB’s environmental impact statement (EIS), was sufficient and was in line with the National Environmental Policy Act, or NEPA.

“Under NEPA, the Board’s EIS did not need to address the environmental effects of upstream oil drilling or downstream oil refining. Rather, it needed to address only the effects of the 88-mile railroad line. And the Board’s EIS did so,” Justice Brett Kavanaugh wrote.

The 1970 law requires federal agencies to review major construction projects and their “reasonably foreseeable” environmental impacts.

The Supreme Court said government agencies are only required to consider the direct impacts of the project under review, and that courts should defer to agencies’ judgments in environmental and other assessments, known as preemption.

“NEPA is a procedural cross-check, not a substantive roadblock. The goal of the law is to inform agency decisionmaking, not to paralyze it,” Kavanaugh wrote.

Kavanaugh noted that the Uinta Basin Railway would give oil producers a more efficient way to reach refineries. “As of now, oil from the Basin is carried by trucks that must navigate mountain passes on narrow roads, a difficult and slow journey in any season,” he wrote.

“Over the years, some have sought to abuse NEPA by unlawfully turning a procedural tool into an ideological weapon,” STB Chairman Patrick Fuchs told FreightWaves, in an email. “Today’s decision is a victory for common sense, economic growth, and meaningful environmental review. I strongly supported the Board’s approval decision and subsequent legal defense, and I am pleased the Supreme Court has upheld the diligent work of the agency for the benefit of the public.”

Justice Neil Gorsuch recused himself from the case because of work he did in private practice for Colorado billionaire Philip Anschutz, whose companies include one involved in oil exploration in Utah.

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