Arch Coal-backed Tongue River Railroad works through issues

Tongue River Railroad Co. (TRRC) told the U.S. Surface Transportation Board on March 2 that board approvals for this Montana rail line is still tied up, in part at the board itself.

TRRC wants to build a coal-hauling rail line in Montana that would hook into the BNSF Railway at both ends and open up a huge new coal reserve area for development along its route, in the Otter Creek coal region. Arch Coal (NYSE:ACI) has been working for the past couple of years to develop a big new mine in the Otter Creek area and has taken a stake in TRCC as part of that process.

The board, as part of a 1996 approval of the railroad, required the company to file updates on project progress every four months. In 2007, the board granted TRRC’s application to construct and operate a 17.3-mile rail line known as the Western Alignment in Rosebud and Big Horn counties, Mont. Certain parties sought judicial review of two decisions in this case, called TRCC II and TRCC III, in the U.S. Ninth Circuit Court of Appeals. On Dec. 29, 2011, the court issued its decision.

“The Court affirmed the board’s decisions in part and reversed in part, remanding the cases to the board to address certain deficiencies in the board’s environmental reviews, including with respect to cumulative impacts analyses, the adequacy of baseline data and the consideration of a no-action alternative,” the update noted. “The petitioners sought reconsideration and rehearing by petitions filed on February 10 and February 13, 2012, asking the court to expressly set aside or vacate the STB’s decisions in TRRC II and TRRC III. The board replied on February 22, 2012, acknowledging that the court’s decision had invalidated the authority granted to TRRC in TRRC II and TRCC III until the deficiencies in the environmental review are corrected and a new Board decision issued. The court denied the petitions for reconsideration and rehearing on February 23, 2012, and the Ninth Circuit proceedings are now terminated.”

In July 2010, environmental group Northern Plains Resource Council (NPRC) and citizen Mark Fix filed with the board a petition to reopen prior board decisions in this case. The petition was opposed by TRRC. In June 2011, the board denied the petition to reopen. In July 2011, NPRC and Fix jointly filed a still-pending petition for reconsideration of the STB’s June denial of the petition to reopen.

TRRC said it has also continued to engage in the Section 106 consultation process with the board. A meeting attended by representatives of the board, other signatory agencies, TRRC and several Native American tribes was held in Rapid City, S.D., in June 2011. Another meeting of many of the same parties, including TRRC, and some additional tribes was held in Rapid City on Jan. 25-26.

By letter addressed to the board’s Office of Environmental Analysis (OEA) dated September 2011, TRRC advised OEA in connection with the Section 106 process that its new owners have determined that they will not, in the reasonably foreseeable future, construct the portion of the TRRC line south of the Ashland/Otter Creek area, i.e., the lines of rail at issue in the TRRC II and TRCC III proceedings. Instead, TRRC will concentrate on moving forward toward the construction of the line between Miles City and the Ashland/Otter Creek area that was the subject of the TRCC I proceeding.

The full TRCC rail route would not only cut the haul distance for Powder River Basin coal from existing mines moving via BNSF to Upper Midwest steam coal markets, it would also open up the Otter Creek reserve area for new mining. Construction of just the Miles City-to-Asland/Otter Creek segment would just open up the Otter Creek area.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.