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
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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