Vail Valley rail line eyed for shipping crude oil from Utah
Trains would roll from Utah's oil fields to Gulf Coast refineries in competing offer from Kansas grain producer
A railroad line through the Vail Valley could carry up to 400,000 barrels a day of Utah crude oil headed to Gulf Coast refineries.
According to industry reports, Union Pacific is negotiating with Rio Grande Pacific for the Tennessee Pass line to make it part of a railroad system to carry crude oil out of Utah’s mineral-rich Uinta Basin.
It could mean between three and 10 trains a day through the Vail Valley.
Competing Tennessee Pass proposals
The news comes on the heels of a competing request by a Kansas grain producer, KCVN, asking the U.S. Surface Transportation Board to force Union Pacific to sell the Tennessee Pass line for $8.8 million. KCVN wants to create more direct access to West Coast ports and grain markets.
Union Pacific dug in its heels against KCVN’s request. Kristen South, senior director of Union Pacific’s corporate communications and media relations, said UP is in “active discussions with another party to potentially restore service to the line, and we plan to continue those discussions.”
KCVN demanded that the Surface Transportation Board reveal who Union Pacific’s “other parties” are. The Surface Transportation Board did that Monday, but by accident. A filing appeared briefly on the Surface Transportation Board’s website, but was quickly removed, the Trains News Wire reported.
“While I cannot provide specifics, I can confirm that we are currently in active discussions,” said Raquel Espinoza, Union Pacific Railroad senior director for corporate communications and media relations, in an email.
Michael Haeg, Rio Grande Pacific’s head of marketing and sales, also declined to comment.
KCVN offered UP $10 million for the 229-mile Tennessee Pass line on November 14, 2019. Union Pacific declined the offer on Dec. 30, 2019.
When KCVN requested the Surface Transportation Board to force Union Pacific to sell, KCVN’s offer dropped to $8.8 million.
It will cost $278 million to rehabilitate it, KCVN’s filing says.
Trains likely years away
If trains roll through the Vail Valley hauling oil or anything else, they would likely be years away.
Utah’s Seven County Infrastructure Coalition is proposing the new Uinta Basin Railway to connect to the national railroad network and move oil, gas and other commodities. The SCIC will work with the Surface Transportation Board to get environmental clearances. Rio Grande Pacific will operate the railway, the SCIC said in a press release.
KCVN already bought the 122-mile Towner Line that runs through Colorado’s Eastern Plains.
Adding the Tennessee Pass line would reopen around 360 miles of railroad from Kansas to Dotsero, and “provide a substantial and significant competitive alternative to BNSF (Burlington Northern Santa Fe) and UP (Union Pacific) to many freight rail shippers in Colorado but also throughout the Western United States,” KCVN says in its STB filing.
KCVN claims that other users would include Martin Marietta Materials, the Climax molybdenum mine, and the American Gypsum wallboard plant and mine in Gypsum.
The Tennessee Pass line runs from Pueblo, over Tennessee Pass and down through the Vail Valley to Dotsero. Union Pacific has not used the Tennessee Pass line since the mid-1990s when UP merged with Southern Pacific.