Railroad’s plan to haul waxy crude through Colorado’s mountains needs $2 billion in government-approved bonds | SteamboatToday.com

Railroad’s plan to haul waxy crude through Colorado’s mountains needs $2 billion in government-approved bonds

Opposition to taxpayers helping foot the bill for Uinta Basin Railway’s “massive carbon bomb” is lining up

Jason Blevins
The Colorado Sun
Crumpled coal cars litter the train tracks in Glenwood Canyon about four miles east of Glenwood Springs, Feb. 16, 2004.
Ed Kosmicki/Special to The Colorado Sun

There’s a new battleground for opponents hoping to stop controversial plans for a short railroad in Utah that could roll 350,000 barrels of dense crude a day through Colorado. 

Utah’s Seven County Infrastructure Coalition earlier this month approved a resolution allowing the owners of the railroad to secure up to $2 billion in “private activity bonds” to finance the construction of the 88-mile railroad that will connect Utah’s Uinta Basin oil fields with the national railroad network. Those bonds will cover only 70% of the project, so the Uinta Basin Railroad could cost as much as $2.9 billion after funding from private investors. The project was originally priced at $1.4 billion when the Surface Transportation Board began studying the plan four years ago.

The bonds are allocated by the federal Department of Transportation, which has approved $16.9 billion of the bonds for transportation projects in 22 states since 2006. All the projects are highway improvements plus a passenger rail project in Florida, with no oil or freight rail plans receiving funding. In Colorado, private activity bonds have delivered $114.7 million to the Central 70 project; $20.4 million for expanded lanes on U.S. 36 between Boulder and Denver; and $397.8 million for RTD’s transportation plan in metro Denver.

The tax-exempt bonds offer very low interest rates, allowing developers — typically public entities — to pursue publicly beneficial projects. A private entity who uses the bonds to finance a project needs the endorsement of a public group — like Utah’s Seven County Infrastructure Coalition.

That endorsement came earlier this month as the coalition — which formed in 2014 to support the construction of the Uinta Basin Railway as a way to better move the region’s waxy crude to Gulf Coast refineries and support the basin’s oil industry — approved a plan that could deliver one of the largest private activity bond issuances ever to the railroad owner, Uinta Basin Railway, LLC.

Read more at ColoradoSun.com.

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