On May 29, the US Supreme Court (SCOTUS) issued a decisive 8-0 ruling in the Seven County Infrastructure v Eagle County, CO case, reversing an appellate court decision that had halted the Uinta railway project. The ruling puts the expansion back on the table for Uinta producers, assuming lower oil prices haven’t dampened interest.
The Surface Transportation Board initially granted approval in December ’21 for investors to build ~88 miles of train tracks connecting the Uinta Basin in northeastern Utah to a Union Pacific Railroad station in Kyune, UT. From there, railcars would travel east through western Colorado to a rail hub in Denver and connect to the national rail network.
East Daley Analytics has closely followed the court case for its implications in the Uinta and for the industry at large. The case considered how federal agencies evaluate the environmental impacts of development. Under the National Environmental Policy Act (NEPA), infrastructure projects approved by the federal government require an environmental impact statement (EIS).
Eagle County argued that the EIS did not adequately address upstream and downstream implications from connecting the Uinta to the national rail network. SCOTUS disagreed. As Justice Kavanaugh wrote in the unanimous opinion, “NEPA is a procedural cross-check, not a substantive roadblock. The goal of the law is to inform decision making, not to paralyze it.” The SCOTUS opinion sends approval of the project back to the US Court of Appeals for the District of Columbia.
The court case will have broader impacts on oil and gas projects and how federal agencies conduct environmental reviews under NEPA. By limiting the scope of NEPA review, SCOTUS may pave the way for faster approval of fossil fuel and other infrastructure projects.
The Uinta has seen growing interest from producers but is hamstrung by geography. The basin is surrounded by mountain ranges and has limited connectivity to markets. Today, the only egress available is to local Salt Lake City refineries (~218 Mb/d of demand) and manifest trains. Connecting to the national railway network would improve transportation economics and allow producer to move barrels to major market hubs. The Seven County Infrastructure Coalition, which forms the Uinta Basin Railway, forecasts crude oil production would grow by ~100 Mb/d in two years if the rail expansion were available.
However, this legal victory collides with commercial headwinds for Uinta producers. WTI prices are trading near $60/bbl as OPEC+ unwinds voluntary production cuts, contributing to fears of oversupply. Compounding these challenges are persistent tariff and trade tensions, which further undermine confidence in new large-scale capital investments. As illustrated in the figure above, we have revised down the Uinta Basin Production Model by ~5% since January '25. Given the current macroeconomic backdrop and a $1.5B estimated cost, the project may ultimately be deferred until the market rebounds.
See EDA's Uinta Basin Crude Oil S&D Report for more detailed asset and market data. – Kristine Oleszek.
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