(CN) - Economic regulators did not take a "hard look" at the environmental impacts of a railway project in Montana that aims to facilitate coal transportation to Midwestern power plants, the 9th Circuit ruled Thursday.
The conservation group Northern Plains Resource Council and rancher Mark Fix filed suit in July 2010 after the Surface Transportation Board refused to stop construction of 130-mile Tongue River III project.
They claim the federal agency failed to conduct enough studies on the environmental impacts of coal trains, and Fix testified that the railroad "would turn the Tongue River Valley into an industrial zone."
STB claims, however, that the challengers failed to prove the need for further environmental studies.
At a July hearing before the 9th Circuit in Portland, Ore., Judge Milan Smith seemed skeptical that the board had properly studied the impacts.
"If somebody wants to trim a forest, you look at what the long-term impact will be," he asked the attorney for the railroad company, David Coburn. "And in this case you go for five years and then you say, 'We're not looking beyond that.' Does that really comply with our case law?"
He added that the "arbitrary" five-year baseline for the environmental impact report seemed "troublesome."
Smith echoed this sentiment in the court's opinion, which he authored Thursday. It states that the Surface Transportation Board did not take a "hard look" at certain environmental impacts of the project, as required by the National Environmental Policy Act.
The STB's analysis "ignores the combined impacts of future coal bed methane (CBM) well development and coal mining projects that will also come into being in Southeastern Montana," according to the 56-page ruling. Smith added that the board did not explain why it could not include data about future development in its environmental impact statement.
"We do not ask the board to peer into a crystal ball," Judge Smith wrote, "The methane EIS [environmental impact statement] report contained actual numbers, broken down by counties, about development over the next 20 years."
"We conclude, therefore, that in this case, an adequate cumulative impact analysis necessarily requires that such information be included," he added. "Accordingly, we hold that the Board arbitrarily and capriciously relied on the five-year time frame, which resulted in a faulty analysis of the possible cumulative impacts from reasonably foreseeable CBM projects that could overlap construction of the railroad line."
Smith also said the STB had failed "to address the cumulative effects of railroad construction combined with water quality degradation from CBM wells, which are estimated to be substantial."
The board also "relied on stale data" and could not "show that its reliance on several-years-old aerial photographs can support its conclusions," according to the panel
Not reviewing new evidence for operation and safety concerns at the Four Mile Creek was an "arbitrary and capricious" decision, Smith wrote. The panel affirmed the board on all the other claims related to the railroad.