(The Associated Press circulated the following story on November 15.)
BEND, Ore. — State funding to promote rail development will help build a private railroad spur that will save fuel shipment costs to Central Oregon.
Ed Staub and Sons Petroleum will be able to eliminate some tanker truck shipments with the new spur, saving about $50,000 a year, said Kent Hicks, plant manager for the Redmond fuel distributor.
“Rail shipping saves us about 7 percent in costs,” Hicks said. “One railroad car holds three truck transport loads, it’s not just the cost of fuel, it’s the equipment we don’t have to have on the road and the employees we don’t have to have in other areas.”
About 75 percent of the construction costs, or $87,000, will be paid for by the state, thanks to a program aimed at boosting economic development in Oregon by funding the creation of rail spurs.
Like Ed Staub and Sons, other businesses in Central Oregon and across the state are expressing a renewed interest in potential cost savings with rail shipping.
“We’ve seen a 10 percent growth in rail traffic in the last year on this line and we are looking at 10 trains traveling through Bend each day,” said Gus Melonas, a spokesman for the Burlington Northern Santa Fe Railroad.
On the Oregon Trunk line, which runs from the Columbia River to Klamath Falls, Melonas said the company has invested $6 million in capital improvements.
“Many observers think of railroads as being obsolete. However, it is the complete opposite,” Melonas said.
Bob Shive, principal broker with Shive & Associates, who helped Ed Staub and Sons find its new location, said he has had a number of inquiries from businesses looking for rail access.
But Shive said that while more people are looking at rail as a cheaper way to ship large volumes, a number of access points to spurs in the Redmond area have been eliminated by rerouting U.S. Highway 97.
“Finding property is extremely difficult,” Shive said.
In 2003, the Legislature approved $8 million in Oregon Lottery-backed bonds for the industrial rail spur Program, in hopes of attracting new industries and expanding existing businesses.
Currently, the funds are being used on 12 projects across the state, including the Ed Staub spur in Redmond, and a spur at an existing quarry near the town of Gateway, north of Madras.
“I think any type of enhancement to the infrastructure is going to mean enhancement to the economic picture,” said Mac McGowan, a spokesman with the Oregon Department of Transportation’s rail division.