State environmental officials have given a Colorado logistics company the green light to build a Jackson County frac sand rail terminal that neighbors have sued to block.

The Wisconsin Department of Natural Resources issued a permit Monday allowing OmniTRAX Logistics Services to fill just over 4 acres of wetlands in order to install nearly 10 miles of track in a loop along the banks of Halls Creek, a Class II trout stream that feeds into the Black River.

OmniTRAX says it will use the terminal to fill more than 80 rail cars per day with sand from a nearby mine. Sand will be processed near the mine and brought to the rail terminal by a nearly 2-mile-long conveyor that will pass under two public roads. The company says it intends to ship about 3 million tons of sand each year to Montana and Texas, where it will be used to extract oil in a process known as hydraulic fracturing.

The permit application originally was submitted in 2016 by the Canadian company Terracor, which later filed for bankruptcy. OmniTRAX, a shipping logistics firm, later acquired Terracor’s assets, including rights to the 945-acre site about five miles north of Black River Falls.

According to the permit, the wetlands are “generally high quality with few invasive species and historic human influence” and are “exceptional” wildlife habitat. The project will have a high impact on the wetland’s functional value and will result in habitat fragmentation, although the overall environmental impact will be “neutral” considering the company’s plans for mitigation and tunnels to allow wildlife to cross under the rails.

OmniTRAX will be required to purchase 5.85 acres of mitigation bank credits, which fund the creation and restoration of wetlands elsewhere.

About half a dozen area residents testified against the project at a public hearing in March, saying the project would have a negative impact on water quality, drive down neighboring property values, and ruin the aesthetics of the creek, a popular destination for paddlers.

Two people who own land that would be used for the loading facility spoke in favor of it.

Midwest Environmental Advocates objected to the permit on behalf of the Ho-Chunk Nation, which has land less than three miles from the site.

“The expansive and permanent destruction of the landscape, including wetlands, for industrial sand mines threatens the Nation’s people, land and cultural heritage,” MEA staff attorney Sarah Geers wrote to the agency. “DNR has repeatedly failed to meaningfully consult or even notify the Ho-Chunk Nation about proposed industrial sand facilities that may impact the Ho-Chunk Nation’s land and people.”

MEA argues the project does not meet the legal standards required for a permit.

As a requirement of the permit, OmniTRAX explored other potential locations but could not find a site with willing sellers and access to a large cache of quality sand located close to the rail line. Because the Union Pacific mainline was built in historic wetlands, there are few suitable adjacent areas to build a rail terminal, according to the DNR.

OmniTRAX does not yet have permission from the U.S. Army Corps of Engineers, which is reviewing archaeological information gathered from the site. Sam Woboril said the Corps would not issue a decision on the federal permit until sometime this summer.

The project also faces a court challenge from three families with adjacent land who sued, claiming the mine and processing facility would create a nuisance and infringe on their rights to the peaceful enjoyment of their own property.

La Crosse County Circuit Judge Scott Horne has yet to rule on whether the case can go forward. He is scheduled to hear arguments May 14 on whether the plaintiffs can update their complaint.

Last year Horne dismissed a similar nuisance case against AllEnergy Sands, which is seeking to build a 750-acre mine and processing operation several miles away. That case is now before the state court of appeals.

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