Proposed railroad could quintuple crude

Associated Press

Promoters of a plan to build a 150-mile railroad that could possibly quintuple oil production in Utah and create 27,000 jobs are asking the state for help with the project’s $1.4 billion price tag.

Members of the Seven County Infrastructure Coalition are hoping that federal grants will eventually cover the big construction cost. But the Salt Lake Tribune reports that before the coalition can apply for those, it must conduct an environmental impact study.

The group plans to ask the Utah Community Impact Board in November for $27.9 million from the state’s share of federal oil royalties to help pay for that.

Mike McKee, executive director of the coalition and a former Uintah County commissioner, said Uinta Basin oil fields now ship about 80,000 barrels of crude a day to oil refineries in North Salt Lake by truck. He said that’s basically the maximum amount that refineries there can handle because of air quality issues.

Production could grow McKee’s group says oil companies report they could produce and sell up to 400,000 barrels a day in the Uinta Basin if they also had a way to economically transport it to other markets.

Previous state studies have said $30 billion worth of oil and gas could remain undeveloped in the basin during the next 30 years because of transportation constraints. Those same studies could not find economically feasible rail or pipeline routes.

McKee said new studies commissioned by the seven counties group have found practical rail routes from Myton, Utah, to Craig or Rifle, Colorado. It hopes to study an additional option to Mack, Colorado, in the environmental impact study.

Opening up Uinta Basin crude would also increase the price paid for it. McKee said it currently is sold at a 20 percent discount from national prices because it goes to only one market. Opening other markets would boost prices and offer incentives for companies to expand Utah operations. - ASSOCIATED PRESS