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Montana coal railroad line faces federal review

Associated Press Modified: November 12, 2012 at 6:45 pm •  Published: November 12, 2012

BILLINGS, Mont. (AP) — Eastern Montana residents will weigh in this week on a proposed 83-mile coal railroad with the potential to usher in a dramatic expansion of mining in the state and increase exports of the fuel to Asia.

The Surface Transportation Board is hosting a series of public meetings beginning Monday in Lame Deer for its environmental review of the proposed Tongue River Railroad.

The $490 million line from Miles City to south of Ashland would haul up to 20 million tons of fuel annually. That's equal to about half the state's current coal production.

The long-stalled railroad was bought last year by BNSF Railway, Arch Coal Inc. and billionaire Forrest Mars Jr., following decades of delays due to court challenges and financing hurdles.

The project's revival comes at what might seem an unlikely time: The coal industry has seen huge declines in mining in some parts of the U.S. as many utilities drop the fuel in favor of cleaner-burning natural gas.

The railroad also faces concerted opposition from environmental groups and some landowners. They warn the line will industrialize rural areas, and that burning the coal could worsen climate change.

The railroad was dealt a setback after its purchase last year when the 9th U.S. Circuit Court of Appeals ruled the transportation board needed to do a new environmental study of the line.

But backers of the Tongue River Railroad said the project could help the local economy and it is well-poised to tap into continued strong demand for the coal in overseas markets such as Asia.

BNSF and other companies want to haul coal from the rich Powder River Basin of Montana and neighboring Wyoming to proposed ports in Oregon, Washington and British Columbia.

A BNSF spokeswoman said in an emailed statement that the railroad and a mine at Otter Creek "could provide a tremendous boost to eastern Montana's economy."

"It will go through a comprehensive environmental review, and the railroad will work with federal and state agencies to ensure stringent environmental standards," wrote BNSF spokeswoman Suann Lundsberg.

Arch is seeking to build a mine at the southern end of the Tongue River Railroad near Ashland, in an area known as Otter Creek.

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