Appeals court lifts stay on coal-hauling rail project in Alaska

Reversing an Oct. 1 order by this court, a three-judge panel at the U.S. Ninth Circuit Court of Appeals on Nov. 28 lifted a stay of a U.S. Surface Transportation Board (STB) of a coal-hauling railroad line project in Alaska backed by Alaska Railroad Corp.

Environmental groups had appealed a November 2011 STB order approving construction of this new rail line segment. The appeals court on Oct. 1 had granted a stay on that STB order while the environmental group appeal was argued out.

In a Nov. 21 brief filed with the court, the Alaska Railroad argued: “If the emergency stay issued by the motions panel remains in place until a written decision is issued in this case, it would have a cascading effect that would delay the Port MacKenzie Rail Extension project for a year, at a cost millions of dollars and over 100 jobs. The panel that heard oral arguments in this case—unlike the motions panel—has had the benefit of a full opportunity to consider the merits of Petitioners’ claims, and is able to judge the propriety of a stay order on that basis. Should the panel conclude that Petitioners are unlikely to prevail on the merits, it has full authority to vacate the motions panel’s stay and prevent the unnecessary harms that would attend a continued delay of the Port MacKenzie Rail Extension project. Intervenor-Respondents Alaska Railroad Corporation (‘ARRC’) and the Matanuska-Susitna Borough (‘the Mat-Su Borough’) are respectfully requesting that the Court exercise its power by lifting the emergency stay imposed by the motions panel.”

The panel in lifting the stay on Nov. 28 concluded that petitioners no longer satisfied the standard for issuance of a stay. “This court initially determined that petitioners raised a ‘serious question’ regarding whether the Board complied with the National Environmental Policy Act in determining the ‘purpose and need’ of a proposed rail line and that the balance of hardships tipped in petitioners’ favor,” the Nov. 28 decision said. “However, upon further review of the record, the panel concluded that the Board’s ‘purpose and need’ statement complied with the Act and that petitioners no longer raised ‘serious questions’ on this point; and the balance of hardships no longer tipped sharply in the petitioners’ favor.”

In a Nov. 9 brief, ARRC told the court: “Three significant things have changed since the Order issuing the emergency stay in this case. First and most significant, oral argument on the merits of Petitioners’ claims was held on November 8, 2012, and the case was submitted for decision. Second, on November 6, 2012, the voters of the State of Alaska approved a bond issue that provides additional funding for the Port MacKenzie Rail Extension. Third, on October 5, 2012, the same three entities who are Petitioners in this case filed a lawsuit in the United States District Court for the District of Alaska directly challenging the Corps of Engineers permit that originally prompted their emergency motion in this Court. As discussed in detail below, each of these changes argues against the continuance of the emergency stay.”

ARRC is planning to construct a 35-mile rail line extension from its main line near Willow, Alaska, to the large bi-modal bulk materials facility at Port MacKenzie. Among the commodities that could potentially be transported on that line is coal headed for the export market. Despite the board’s approval last year, ARRC’s ability to proceed with staged construction of this project was constrained for many months by the fact that it had not yet acquired a Clean Water Act Section 404 permit from the Corps. On Sept. 10, however, the Corps issued its permit.

ARRC plans to proceed with construction of the Port MacKenzie Rail Extension in eight stages, or “segments.” So far, only one of the eight contracts has been awarded, which is the contract for construction of Segment 1, the Nov. 9 ARRC brief said. When the Corps issued its Clean Water Act permit, ARRC authorized its Segment 1 contractor to proceed with all permitted activities. The most recent schedule that ARRC received from its contractor indicated that the majority of filling activities authorized by the Corps permit in Segment 1 would commence in February 2013. Some preliminary work, such as grade preparation and bridge construction, was expected to occur before the end of the year.

Two other segments, Segment 3 and Segment 6, had been set to go through the public bidding process in September. Work on these segments was expected to begin in the spring of 2013, with Segment 3 being completed by the end of 2013 and Segment 6 being completed in 2014. In light of the passage of the bond measure by Alaska voters, ARRC further plans to bid out Segment 4 in January 2013. The remaining project Segments (2, 5, 7 and 8) are anticipated to be under contract in fall 2013. Track construction (Segment 8) is not anticipated to be complete before the end of 2016, at which point rail operations over the entire new line would begin.

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.