A proposed rail line from Farmington to Thoreau, N.M., has piqued interest on both sides of the border from firms interested in shipping products in and out of the Four Corners.
Businesses have long complained there’s essentially only one way to move large amounts of products in the region – trucking.
New Mexico Tech is conducting a feasibility study to see if the project can be engineered effectively and to verify there’s adequate demand for rail. The proposed line would roughly follow N.M. Highway 371, which plunges south from Farmington to Thoreau, about 120 miles, passing through Navajo lands.
BNSF Railway Co. and the Navajo Nation have been involved in discussions regarding the line, which would connect with an existing BNSF rail line.
Some are skeptical that a rail line is a realistic possibility. But if the project forges ahead, it could open new markets to isolated Four Corners producers and reduce the costs of importing products.
A range of major businesses could benefit, including natural-gas producers and the Navajo Nation, economic development officials said.
In La Plata County, the King II Mine in Hesperus is emblematic of an industrial operation that could benefit from rail.
The King II Mine, owned by GCC Energy LLC, produces 700,000 tons of coal per year. About 80 percent of it is trucked to a rail line at Gallup, N.M., while the rest is trucked directly to customers. To move the coal, the Hesperus mine sends out 85 to 90 trucks each weekday.
“Currently, we move coal by truck to Gallup and load it on rail there,” said Trent Peterson, vice president of the mine. “So putting rail in Farmington would put it 120 miles closer or something like that, which would cut our transportation costs significantly.”
The King II Mine supports 120 jobs in the county.
The Navajo Nation has several industrial businesses that could use rail.
The tribe recently completed the purchase of Navajo Mine, a coal mine that feeds Four Corners Power Plant west of Farmington. A rail line could open the market for Navajo Mine’s coal beyond just the adjacent power plant.
Likewise, the tribe’s agribusiness entity, Navajo Agricultural Products Industry, known as NAPI, could more easily transport its potatoes, flour and other products out of the region.
La Plata County businesses could benefit from rail in other ways.
“It could help with material and product costs for getting here,” Roger Zalneraitis, executive director of the La Plata County Economic Development Alliance, said in an email message. “Rail demand is on the rise throughout the U.S., in part because it is offering a competitive price for shipping. Our hunch is that inbound product prices could drop as a result of having a more affordable transportation option than truck traffic.”
Zalneraitis said rail could also benefit the natural-gas and oil industry by reducing costs to get equipment to the San Juan Basin and potentially opening new manufacturing opportunities.
Car dealers are also interested to see if rail can cut their costs, said Kim Carpenter, chief executive of San Juan County, N.M.
Yet some are skeptical the project – estimated to cost around $300 million – will ever make it past the drawing board.
“It’s never going to happen,” said Jack Fortner, a county commissioner in the Farmington area. “Where’s that money going to come from?”
Fortner and other San Juan County, N.M., officials discussed the proposed rail line during a public meeting with their La Plata County counterparts last week.
Much of the push is coming from the Navajo Nation, San Juan County officials said. Carpenter cautioned that momentum could diminish if Navajo Nation President Ben Shelly is not re-elected in November.
“If Ben Shelly is not re-elected, that could represent a slowdown in the project,” Carpenter said.
Carpenter acknowledged financing is an obstacle. County and economic development officials are counting on the Navajo Nation and BNSF to do the heavy lifting.
A BNSF official reached Monday said she was not available for comment, and a call to the Navajo Nation president’s office was not returned.
As envisioned, industrial parks at each end would anchor the rail line.
“What is critical to the success of it long-term is that BNSF and the Navajo Nation have committed to jointly develop a 400-acre industrial park in Thoreau,” said Ray Hagerman, chief executive officer of Four Corners Economic Development in Farmington.
That park is slated to open in summer 2015, Hagerman said.
“It’s very likely that by the time they come online in 2015, they’ll have that industrial park fully sold out,” he said. “That creates a need to create an industrial park on the other end” in Farmington.
If all goes well, the rail line could be operational in four to five years, Hagerman said.
At present, there’s no serious discussion of extending the rail line into Colorado. But moving rail into northern New Mexico would make it cheaper to get products in and out of La Plata County, opening a range of new business opportunities, economic development officials said.
Hagerman said he’s hopeful the project will come to fruition.
“It’s going to take a while, but we’re still hopeful,” he said.