Tongue River Railroad argues against STB termination of its case

The Tongue River Railroad Co. Inc. told the U.S. Surface Transportation Board that a March 15 bid by the Northern Plains Resource Council and Rocker Six Cattle Co. (jointly referred to “NPRC”) to get the board to terminate its review of a planned Montana rail line should be rejected.

The railroad has asked the board to hold this proceeding in abeyance because railroad co-owner Arch Coal, which is in Chapter 11 bankruptcy protection, has shelved plans for the Otter Creek coal mine in Montana, which would be the initial customer for this rail project. The opponents instead want the proceeding terminated.

The railroad noted in an April 5 brief that NPRC bases its position on the proposition that Arch has “abandoned” its effort to permit the Otter Creek mine and that the effort to do so is “dead for the foreseeable future.” The railroad added: “However, NPRC’s contentions notwithstanding, the Otter Creek mine and TRRC rail projects have not been abandoned and Arch has merely suspended its permitting efforts for a variety of reasons. Arch still holds a valuable lease from the State of Montana for the Otter Creek tracts, for which it paid millions of dollars. While Arch has suspended for the time being its efforts to obtain a permit for the project from Montana DEQ, an economic case for mining at Otter Creek, as reflected in no uncertain terms in the extensive record of this proceeding and in the April 2015 Draft EIS issued in this proceeding, remains viable over the medium and long term. Thus, it would be inconsistent with the record in this case to conclude that the Otter Creek tracts will never be mined and that the Tongue River Railroad will never be needed – and neither Arch nor TRRC have reached any such conclusions.

“The decision of when to proceed with the Otter Creek Mine and Tongue River Railroad projects will and should ultimately be left for the proponents acting in response to the energy market. By holding this proceeding in abeyance, the Board will allow time for the proponents to gauge market developments and make decisions on when and how best to proceed. Further, as the Board knows, energy markets can change quickly, and what is now a weak market for coal can become a stronger one over time, particularly to the extent that natural gas prices rise. Moreover, Arch remains actively engage in the coal mining business despite its ongoing Chapter 11 reorganization.”

This railroad project would interconnect the proposed Otter Creek mine with an existing BNSF Railway line.

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.