EUGENE — Members of the U.S. Surface Transportation Board came to Eugene on Thursday to consider the fate of the rail line that connects Coquille to Eugene.

Chairman Charles Nottingham and Commissioner Douglas Buttrey listened to more than six hours of testimony from about 40 speakers. Vice Chairman Francis Mulvey was unable to come because he’s recovering from a bicycle accident.

Gov. Ted Kulongoski and Congressman Peter Defazio, D-Ore., were the first to speak. They both called on Nottingham and Buttrey to refuse a request by Central Oregon & Pacific Railroad to abandon the line.

Kulongoski told them the region already is suffering from the loss of Greyhound buses and the threat of commercial air service cancellation to Portland.

“At some point providing infrastructure for rural America cannot be just a bottom line-accounting decision,” Kulongoski said. “Otherwise small economic regions like the southern Oregon coast will become more isolated and economically unstable.”

Both Kulongoski and Defazio blasted managers of CORP’s parent company RailAmerica, which is owned by Fortress Investment Group LLC, a New York-based equity fund manager. Defazio said the company bought the railroad, knowing full well its condition, with no intention of making repairs. He called the company’s request a “bad faith abandonment proposal.”  

The board also is considering an application from the Oregon International Port of Coos Bay to buy the rail line for $9.8 million. Kulongoski and Defazio voiced support for the proposal and the governor pledged state assistance to buy the line.

The port didn’t have unanimous support from speakers, because of its pursuit of a liquefied natural gas terminal development. Anti-LNG activist Jody McCaffree of North Bend said she supports restarting the railroad. However, she is concerned about the port being in charge of it, since an LNG facility would entail shipping natural gas byproducts on the rail line.

CORP halted traffic in late September 2007, giving only 24 hours notice. Since then, industry has scrambled to get products across the coast range.

American Bridge Plant Manager Fred Jacquot said his company had planned to increase its workforce from 80 to 120 employees and to expand its operations, but the company has lost new contracts because of the added cost of trucking. The Reedsport manufacturer of steel components for bridges has projects including the San Francisco Bay Bridge and Hoover Dam Bypass.

 The board got an earful on how hard hit the region is by the rail line loss. Roseburg Forest Products’ president, Allyn Ford, who heads of the Coos-Siskyou Shippers Coalition, urged the board to accept the Port of Coos Bay’s feeder line proposal.   

“Access to inland markets is key to our survival,” he said. “We export most of our finished products to major markets in the states west of the Mississippi River. Rail is the only economical way to access these inland markets.”

Menasha Forest Products’ Eric Farm echoed those comments, saying that if he’s forced to truck every load, it costs $300 more per load. That adds up to $3.2 million a year in higher costs at a time the economy already is in trouble.

Speakers also pointed out the danger of putting more trucks on the roads that snake through the coast range.

Chairman Nottingham was sympathetic.

“There are people in Washington who probably need to fully appreciate what’s going on here and how it continues to ripple,” he told them. “We’ve heard today about extensive societal costs that are playing out in this region and across the country.”

RailAmerica’s vice president of operations, Paul Lundberg, and company attorney Terrance Hynes defended their railroad, saying it made a good faith effort but the line just isn’t profitable.

“We didn’t walk away,” Lundberg said. “We tried for several months to come to terms with a relationship that was going to maintain service on the Coos Bay line, as well as protect the interests of the Central Oregon and Pacific Railroad.”  

Hynes said the line was losing money and the only way to save service is through a public-private partnership. He then praised the federal process. That prompted Nottingham to shoot back that people who’ve lost their jobs in Coos County would not agree that the process has gone well.