Reopened Kremmling rail spur ready to roll
July 9, 2010
A Union Pacific spur that once served the Kremmling depot will soon reopen now that a contract has been signed between the railroad and Confluence Energy.
The spur is a strategic and critical transportation tool for moving wood pellets and other Colorado beetle kill products to markets across the nation, said Confluence Energy founder and CEO Mark Mathis, who has been in negotiations with Union Pacific over reopening the spur for three years.
Per the 5-year-contract, Union Pacific will provide up to 23 empty cars a week on the siderail and once a week will come to haul the full cars to their destination.
“I won’t be able to fill all the cars with my product,” Mathis said, “so I’m inviting other people who are looking for an opportunity to transport material out of the region to places you can’t get to with rubber tires cost effectively.”
Mathis said he isn’t planning to profit off the partnerships, he’s just hoping to open up the opportunity to more regional businesses.
The 1,500-foot spur hasn’t been active commercially in quite some time, Mathis said. More than 25 years ago, the railroad mothballed the Denver, Northwestern and Pacific Railway train depot that had served as a loading point for passengers and mail since 1906.
The Grand County Historical Association saved the depot from demolition two years ago. With donations and support from the community, the depot was moved to the Heritage Park Museum site.
The Town of Kremmling helped return the loading area to usable condition in recent weeks, grading the road, building up the loading area so water wouldn’t pool there, working with the utilities and improving the access off the main road.
Mathis said he has been talking to some of his logging partners and friends in the mill business about taking advantage of the opportunity to share space on the train cars, although he’s open to partnering with just about any business that would benefit from rail service.
Mathis believes that revitalizing the spur will help create jobs by providing more movement in product.
With all the beetle kill still standing in the county and no market for it here, timber sales have been slow, he said: “If somebody can figure out how to get the logs out of here, it would definitely be an economic driver.”
The pellet plant in Kremmling is still running at about half-speed and sales are struggling, Mathis said. But, he added, he’s kept about 16 people on staff and is working on deals to add more value to his product.
While the focus has been on using the rail to move beetle kill products, the opportunity doesn’t end there, said Kremmling Mayor Thomas Clark.
“This is a benefit to the whole community,” he said. “This is an outlet to ship some of this material out of here – pellets or any other wood products – but, it’s not just limited to that. If somebody wants to ship grain or lettuce that would be fine too.”
As for the focus on beetle kill, however, Clark said: “This is the first new industry we’ve had come in here in many years, and it’s as a result of dead trees.”
In search of a market
The major issue for the timber industry is finding a market for the logs. Currently there are log stacks sitting in the woods around the county ready to go, but there is no market, no sawmills and the truckers have all but disappeared, Clark said.
“Rail is the cheapest way to ship things besides boat,” he added. “This is opening up an opportunity for folks.”
For its part, Union Pacific is looking for opportunities to increase its smaller customer base wherever it can said Mark Davis, media relations director for Union Pacific.
“Because of the recession, we have a lot of capacity that we didn’t have four years ago,” Davis said. “We are re-reaching out to customers, both those who have used rail before and first timers to see if we can find other needs for those idle cars.”
Davis added that rail is generally only competitive when the market is more than 200 miles away.
For instance, he said, with the lumber mill in Montrose closed now, there may be an opportunity to move the logs longer distances to a mill, particularly if the mill is also served by rail. But, even if it isn’t, a “short burst of truck” can be used to help the product reach its final destination, he said.
– Reid Armstrong can be reached at 970-887-3334 ext. 19610 or email@example.com.