Tongue River Railroad puts Montana coal line plan on hold

The Tongue River Railroad (TRRC) has asked the Surface Transportation Board (STB) to suspend the permitting process for the railroad's plan to build a 42-mile line that would haul coal from a proposed mine in southeast Montana.

The railroad requested that the STB put on hold its consideration of the application until the Montana Department of Environmental Quality (MDEQ) issues a final decision on the Otter Creek Coal Mine permit application and judicial affirmation of a permit-granting decision, according to a petition the railroad filed with the STB on Nov. 25.

The TRRC is jointly owned by BNSF Railway Co., Otter Creek mine owner Arch Coal Inc. and TRRC Financing LLC. The proposed rail line would connect BNSF's Colstrip Subdivision with two terminus points, each located near undeveloped coal deposits near Ashland, Mont.

Otter Creek Coal filed the mining permit application in July 2012. The application has faced a number of delays, and remains pending. Under Montana's environmental regulations, an environmental impact statement must be prepared before the mining permit is approved. Although a scoping process has been completed, a draft environmental impact statement has not yet been issued by the MDEQ.

The entire permitting process likely won't be completed until the latter half of 2016, at the earliest. Any judicial review of the final permit decision likely would delay the final decision on the permit for another year or more, the TRRC's filing with the STB stated.

The permit application, as well as the proposed rail line, has faced significant opposition from local residents and national environmental groups, TRRC officials acknowledged in the filing.

Between the delays in the permitting process and current weakness in the coal market, the mining company and railroad's original timeline is much longer than originally anticipated for beginning operation, they said.

"While Otter Creek Coal believes that it will ultimately be successful in obtaining that permit, there is some level of risk inherent in any permitting proceeding of this nature and in any judicial review proceeding that will follow issuance of the mine permit," according to TRRC's petition.

"In short, holding this proceeding in abeyance pending a better understanding of the filing related to receipt of a final, judicially affirmed mine permit decision will remove any doubt as to whether there will be a permitted mine to serve," the petition stated.