Bluefield Daily Telegraph, Bluefield, WV

Sister Newspapers' News

July 23, 2012

DOH says coal company may want rail trail to serve mine

Approximately $200,000 has already been spent to develop Meadow River trail system

FAYETTEVILLE — According to a West Virginia Division of Highways (DOH) briefing, a publicly funded rail trail project in Fayette and Greenbrier counties could be at risk of losing its rail bed to a coal company. So far, however, no company will confirm its involvement in the alleged plan.

DOH officials reported to the Fayette and Greenbrier county commissions at a June 29 meeting that Xinergy Corp. wants to use the rail bed of the planned Meadow River Rail Trail to move coal out of a newly acquired surface mine northwest of Lookout.

Approximately $200,000 in state, county and federal stimulus funds has already been spent on the rail trail project, with over $1 million in pending grant funds potentially also coming down the pike.

Chris Halouma, director of investor relations for Xinergy, says the company does not own or lease any land in Fayette County and cannot confirm the DOH’s report. He also says the company is not pursuing any permits or leases there of which he is aware.

Parcel map and surface mine permit application searches did not unearth any evidence of Xinergy’s prospecting in Fayette County.

A 64-acre surface mine permit application by Eagle Ridge Development Group is currently pending in the same area described by the DOH in its report to the county commissions. But company spokesperson Perry Queener says Eagle Ridge is not involved in the alleged deal.

The planned 17-mile Meadow River Rail Trail — a partnership between the Division of Highways and the Fayette and Greenbrier county commissions — would run from Rainelle to Nallen.

The rail bed was purchased by both counties from CSX last November.

Bill Robinson of the DOH calls it “the most important rail project in the state right now.”

A set of plans has already been drawn up for the path, and the DOH was ready to open bidding for the building of the trail when Ryan Burns of the DOH said an employee of Xinergy approached him expressing an interest in the line.

According to Burns, the employee said the company has already secured a lease on a surface mine operation in the area and is looking for a rail option to move the coal to market. He reportedly shared a PDF with Burns containing a map of two rail options.

The first, a northern route from the mine, would tie in with a live line at Gauley River. Abandoned in the 1990s, the line was broken up and is now in the hands of a variety of private owners, including the National Parks Service (NPS).

Robinson says this option would be impossible given the number of owners and the fact that NPS is one of them.

“We immediately recognized the danger that instead of moving north they could swing south, possess the rail, re-track it and tie it in at Rainelle. That appears to be the only commercially viable thing,” Robinson told the commission.

“Everything you purchased would disappear into the new rail line.”

"They are willing to invest any amount of money it will take to make this happen,” says Burns. “I informed him about the rail trail, and it didn’t seem to be a concern. He was more concerned about how much it would cost to buy out the trail and put the track back in.

“He asked me not to put up any red flags, but as a steward of taxpayer money, I can’t not tell people.”

The company did not seem interested in a haul road option, according to the employee who spoke with Burns.

The Surface Transportation Board in Washington, D.C., has jurisdiction over all rail restructuring transactions, including line construction and abandonment.

“The way I understand how the Surface Transportation Board works is they award the highest and best use, and the railroad is the highest and best use. (...) They could rule that we can’t build our trail if the coal company demands use of the rail,” says Robinson.

He did not know whether a company taking such a tack would have any obligation to reimburse the taxpayer money already spent.

Plans for the construction phase of the rail trail have been halted, says the DOH.

Nevertheless, the owner of the alleged surface mine is still not clear.

Fayette County Commission President Matt Wender said it seems odd that a company would invest millions in a lease without a plan for transporting the coal.

“Furthermore, why are they not sending out some kind of indication of interest and participating in this?” said Wender. “I think this coal company should immediately make known who they are and what their intentions are.”

Robinson says all this will become a critical issue in August, when his agency will firm up recommendations to the governor about which trails projects to fund.

“We can’t in good conscience send a recommendation to the governor with a shadow like this hanging over it,” he says.

The stimulus funds for the project must be spent by September 2013.

Based in Knoxville, Tenn., Xinergy operates surface mines in Kentucky, Virginia and West Virginia, including the South Fork operation in Greenbrier County under its subsidiary, South Fork Coal Co.

The Fayette County Commission decided to write a letter to both Xinergy, asking about their intent, and the Surface Transportation Board, asking about how uses are prioritized when taxpayer money has been expended on a project.

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