After 34 years, Montana Coal Rail Line Project Remains in Limbo
STB on Dec. 3 said it would review the petition to hold the construction application “in abeyance.”
Otter Creek Coal and BNSF Railway are two of the railroad’s owners.
If built, the plan is for BNSF to operate Tongue River’s trains over a route that is 42 miles long, saving hundreds of miles for coal shipments from the north end of the Powder River Basin in Montana and Wyoming, which is the nation’s largest source of low-sulphur coal. The goal was to lower the cost of shipments to upper Midwest utility customers.
Construction of the Tongue River Railroad, named for a waterway that parallels part of its proposed routes, was first presented to the Interstate Commerce Commission in 1981. The initial plan was to run the tracks from Decker, Montana, where BNSF’s existing coal line ends, to Miles City, Montana, on that railroad’s main line across the state — a distance of about 120 miles. In the interim, at least possible routes have been evaluated, including one that covered 177 miles.
The abeyance request was triggered by the need for Otter Creek Coal, one of the railroad’s owners and a subsidiary of Arch Coal, to receive a permit from the Montana Department of Environmental Quality to build a coal mine.
“Unless and until Otter Creek Coal obtains a final, judicially affirmed permit from the state of Montana allowing it to develop a mine, and that mine is then developed, any TRRC rail line will have no coal to transport and therefore no reason to be constructed,” the company told STB.
Otter Creek filed an application to build that mine three years ago, but the state agency twice has told the company there are deficiencies in its application. Soon after the original Otter Creek application was filed, the Tongue River Railroad sought STB approval for the latest version of its application. The U.S. regulatory agency’s review still is at the environmental review stage that must be completed successfully before the construction application can proceed.
The state review process “is likely to consume at least many more months, likely pushing a decision granting or denying the permit off until the latter half of 2016, at the earliest,” the applicants told STB. “Further, any judicial review of the Otter Creek mine permit would push the timeline for any final determination of whether and when the mine might be developed out further, perhaps for another year or more after the permit is granted.”
If those hurdles are overcome, another Montana state agency would have to issue a construction permit.
The applicants told STB that holding the application in abeyance would save money for the companies and the agency alike until the state agency rules.
The Tongue River saga, which began five years before STB was created to replace the Interstate Commerce Commission, began when Otter Creek and two other companies that no longer are involved asked to build 80 miles, or about two-thirds of an original route plan at a cost of about $117 million. However, no construction was started since a separate application was needed to complete the route to Decker as coal demand changed and opposition emerged from area ranchers whose grazing lands would have been bisected by the railroad.
Subsequently, the Tongue River ownership changed and several routing options were proposed to STB, none of which was ever approved. Still another Montana agency that regulates fish and wildlife rejected the railroad’s bid to run through the river region.
The project was revived in 2010 when the state agreed to coal leases at the mine site, and a fresh application was filed in 2012 using a shorter route from the mine site in Ashland, Montana, to a BNSF line 42 miles away. The shorter route, with a projected cost of $416 million, had been rejected earlier because of steep grades, the railroad’s STB application said.
