Stb

In this appeal we consider whether principles of administrative law and a controlling statute governing railroad extensions and applicable protections of environmen tal laws require us to grant a petition for review of a specialized agency’s decision to permit the extension of a railroad line to Port MacKenzie, Alaska. Petitioners Alaska Survival, Sierra Club, and Cook Inletkeeper seek review of the Surface Transportation Board’s (STB) decision authorizing Alaska Railroad Corporation (ARRC) to construct about thirty-five miles of new rail line between Port Mac-Kenzie, located in Alaska’s Cook Inlet, and the railroad’s main line, located near Was-illa, Alaska. The STB granted ARRC an exemption under 49 U.S.C. § 10502 of the Interstate Commerce Commission Termination Act of 1995 (ICCTA) and authorized ARRC to construct the rail line. Petitioners challenge the STB’s authority to exempt the railroad from the full licensing provisions of 49 U.S.C. § 10901 and the agency’s compliance with the National Environmental Policy Act (NEPA). Respondents claim that Petitioners did not administratively exhaust the issue of whether the STB properly granted the exemption and that the issue…