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Coal railroad's delay reflects hurdles for exports

Published on NewsOK Modified: July 18, 2014 at 5:50 pm •  Published: July 18, 2014

BILLINGS, Mont. (AP) — U.S. coal industry efforts to tap into the growing export market are struggling to gain traction, as bureaucratic hurdles and resistance from environmentalists slow proposed mines in the Northern Plains, ports on the West Coast and now a proposed coal railroad in Montana.

The Surface Transportation Board said Friday it will take until next April to complete its draft analysis of the Tongue River Railroad. That's the second significant delay in work originally scheduled for completion last year.

The $403 million proposed rail line is jointly owned by BNSF Railway, Arch Coal, Inc. and candy-industry billionaire Forrest Mars, Jr.. If built, it would open the door to new mines in the Powder River Basin along the Montana-Wyoming border — home to one of the largest coal reserves in the world and the supplier of about 40 percent of the fuel burned in the U.S.

Surface Transportation Board spokesman Dennis Watson said the decision to bump back the schedule on the railroad study was made to accommodate the "intense interest" in the project. The additional time will give all sides a chance to make their views known, he said.

Coal companies want to move more of their product to markets in Asia as domestic demand wanes due to stricter pollution rules and competition from cheap natural gas. The quickest route is through the West Coast. Yet despite modest growth in recent months, West Coast export volumes remain severely constrained by limited port capacity.

The railroad's sponsors say that in addition to international markets, there is more than enough domestic demand for coal from Arch's proposed Otter Creek mine, which the rail line would serve.

Midwest utilities including Minnesota Power and Wisconsin Electric Power Company have told transportation officials they support the rail line.

"The Tongue River rail line will be built if, as the owners believe, there will be a demand for Otter Creek coal in the coming years," the railroad's attorney, David Coburn, wrote in a filing with the Surface Transportation Board.

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