Federal board takes Tongue River Railroad case back to much of its beginnings

The U.S. Surface Transportation Board on June 18 issued a decision that sets up a process for responding to a federal court’s decision in a case brought by the Northern Plains Resource Council affirming in part, reversing in part, and remanding for further environmental review the board’s decisions in two proceedings authorizing the construction of portions of the coal-hauling Tongue River Railroad in Montana.

The board, in a decision reached on June 13 and issued on June 18, is dismissing both of these proceedings because the railroad no longer intends to construct the rail lines that were the subject of those applications. The board will reopen one of the cases to require the railroad to submit a revised application that reflects its current plans for the line that the railroad still wants to build, and to conduct a new environmental review. The board will also dismiss as moot a pending petition for reconsideration of the board’s 2011 denial of an earlier petition to reopen, deny a request that it set a procedural schedule, and address certain other procedural requests.

Over the course of the past 30 years, the board and its predecessor, the Interstate Commerce Commission, issued three decisions authorizing construction of portions of the proposed 130-mile Tongue River Railroad, subject to environmental conditions. No portion of the proposed line has ever been built. Petitions for review of the last two decisions were filed in the Ninth Circuit, and, in 2011, the court partially reversed and remanded those decisions for additional environmental review. The Tongue River Railroad Co. (TRRC) has now informed the board that it does not intend to build the Tongue River II and Tongue River III portions of the railroad.

TRRC, which now has co-ownership by Arch Coal (MYSE: ACI), is proposing to build the approximately 80-mile portion initially authorized in 1986 in the proceeding known as Tongue River I, as modified in Tongue River III. Although Tongue River I was not directly at issue before the Ninth Circuit in the Tongue River II and Tongue River III appeal, the court’s decision requires the board to revisit the environmental baseline data and cumulative impacts analyses that also would apply to the Tongue River I rail line because the board made the resulting mitigation conditions applicable to all three rail lines in its Tongue River III decision.

TRRC has also informed the board of a recent transfer in ownership of TRRC and changes in the purpose and need for the proposed line. Thus, the board must now decide which Tongue River proceeding to reopen; what type of revised application should be required to reflect the changes in TRRC’s proposal; and whether to supplement existing environmental documents or prepare a new environmental review.

The recent Ninth Circuit decision and TRRC’s new ownership and modified plans all constitute changed circumstances that warrant reopening. The board will dismiss the Tongue River II and Tongue River III proceedings and will reopen Tongue River I. The board will also require TRRC to file a revised application that presents the railroad’s current plans for the railroad it still intends to build. In addition, the board will conduct a new environmental review that is consistent with the court’s decision rather than a supplemental environmental review based on the three prior environmental reviews that began in the 1980s.

After 30 years of fighting through opposition from environmentalists and local ranchers, the TRRC now wants to build only the 80-mile section from around Ashland, Mont., to a BNSF Railway mainline at Miles City. This portion would allow access to Arch Coal’s planned new strip mine in the Otter Creek area around Ashland. The TRRC has abandoned plans to build a further segment to the southwest from Ashland to an interconnect with the BNSF near the existing Decker and Spring Creek coal mines. The TRRC is hoping that the shortened segment will be easier to get through the approval process.

What the new plan does, though, is that it cuts out one of the advantages of the Tongue River Railroad, which was to shorten the distance that coal moving from the Decker and Spring Creek mines has to travel to get to Upper Midwest markets, like in Minnesota. That’s because the original, full project would have been a short-cut of 130 to 160 miles, cutting out a big loop of BNSF track that swings to the northwest after Decker and Spring Creek, then loops back to the northeast as it passes through Miles City where the Tongue River Railroad interconnect would be. Notable is that this short-cut also would have applied to any mines shipping coal north via BNSF out of the Powder River Basin mines in nearby Wyoming.

STB: Changes in ownership and other factors warrant a new look

“Because of the recent transfer of ownership of the railroad to BNSF, Arch Coal, and TRR Financing LLC, and the other changes to TRRC’s plans that have taken place since 1986, the Board on remand will not be addressing the same proposal that was before the agency in Tongue River I,” the board noted. “Although the railroad has advised the Board of these changes, it has provided few details and interested parties and the general public have had no chance to address any concerns about the transfer of ownership and changes in TRRC’s plans that they might have. Requiring a revised application containing the information discussed above will ensure that, when the Board again considers the transportation merits of TRRC’s proposal, it will have before it a complete and current description of TRRC’s plans and financial fitness, and any replies raising concerns about TRRC’s revised application that might be filed. Therefore, the Board will dismiss Tongue River II and Tongue River III and reopen Tongue River I to require a revised application that reflects TRRC’s current plans.”

TRRC has suggested that a supplemental environmental impact statement (SEIS) might be sufficient to respond to the court’s concerns and to comply with the requirements of the National Environmental Policy Act. The Board disagreed for several reasons.

  • First, in Northern Plains, the court held that the baseline data used to assess the potential impacts of TRRC’s proposals in the prior EISs were too stale and that some of the board’s surveys were inadequate, which means that they could not be used in the environmental review on remand. The fact that the agency’s prior EISs are old, going back in Tongue River I to environmental analysis prepared in the 1980s and in Tongue River II to the 1990s, might not be enough standing alone to make them invalid. Given the court’s partial remand, however, it would not be appropriate to continue building on an environmental foundation that has been found to be unsound, the board wrote.
  • Second, most of the board’s more recent environmental analysis pertains to the area around line segments the railroad no longer proposes to build.
  • Third, scoping is required for new EISs but is not for supplements. Scoping is meant to be an early and open process to determine the scope of issues to be addressed in an EIS and the significant issues related to a proposed action. As part of scoping, the board issues for public review and comment a notice of intent to prepare an EIS and a draft scope, invites the participation of potentially affected agencies, Indian tribes, and other interested persons, and typically holds a scoping meeting in the project area. A final scope is issued following the receipt of comments on the draft. It is appropriate to do scoping again here given the passage of time since the board issued its Tongue River I decision, the fact that no part of the Tongue River Railroad has been built, the changes to the railroad’s original proposal, and the fact that different individuals, tribes, and agencies might be interested in this project now than those who participated in the 1980s, the board wrote.
  • Finally, a new EIS will encourage and facilitate public participation throughout the environmental review on remand because interested parties will have all the relevant information in one place and will not need to review multiple EISs prepared over the course of 30 years that include extensive analysis on line segments the railroad no longer intends to build.
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.