East-West Train Back From the Dead—Again

Zombie train illustration by Terry Torgerson.
Zombie train illustration by Terry Torgerson.

Like a zombie, the east-west railroad is back from the dead. Last we looked, in February 2017, Trinity County gave the idea a fatal blow by refusing a grant to perform a feasibility study of the railroad (when was the last time you saw a local government turn down free money?) and Eureka drove the final nails in the coffin by withdrawing its support of the railroad. But now the railroad proposal is back from the dead, and like in any zombie movie, it is scarier now.

Today’s train proposal is similar to past ideas—a rail line running from the I-5 corridor to Humboldt Bay, siphoning enough shipments from other ports to bring in big freight ships and oodles of blue collar jobs—but the new proposal is more fanciful. We environmentalists have ignored this new version because, to be frank, we thought this proposal was so absurd that it deserved no attention. But now that salesmen and politicians are pushing this new train proposal, it is time to remind people: not only is this  a dumb idea that is not worth your time, but local “investors” may be bilked of their money. Here’s why.

The idea of an east-west railroad has been studied ad nauseum, from the 1909 Lentell study to a 2013 study produced for the Humboldt Bay Harbor, Recreation and Conservation District. Each time it has been studied, the practical difficulties of constructing a rail line—the route would need to cross our infamously unstable and steep coast range—would drive up costs. The 2013 study concluded that the cost of developing a rail line would be 1.1 to 1.2 billion dollars. Based on that cost, “the estimated volume of rail cargo required to make a new rail route to Humboldt County economically feasible would make Humboldt Bay one of the largest dry bulk ports on the West Coast”—larger than Seattle, Tacoma, Vancouver, Long Beach and Los Angeles. A port in Humboldt offers few competitive advantages to these existing ports and a number of substantial disadvantages.

Today’s proposal comes at a much steeper cost. Project proponents estimate the rail construction to cost four billion-“plus”, together with another six billion-“plus” for port development. With no government willing to front the cash to develop the project—again, because this is a boondoggle—the developers are trying to gather $10 million in seed money from local “investors” to prove, supposedly, that there is local buy-in
on the project.

This investment, as outlined in documents by Ryan Burns in the Lost Coast Outpost, more resembles a Ponzi scheme than an actual business. According to Burns’ reporting, investors were promised that once the first $100 million in gross proceeds was raised from a subsequent stock offering, initial investors would be paid back at four times their initial investment. Regardless of whether that amount—or any additional amount—is ever raised, those closest to the project are to be paid for their “work.” To be fair to the project developers, they offer clear warning signs that this is a scam. In all caps, the Outpost states, proponents warn: “THERE IS NO MARKET FOR THE COMPANY’S SECURITIES. NO INVESTMENT IN THE CLASS A UNITS SHOULD BE MADE BY ANY PERSON NOT FINANCIALLY ABLE TO LOSE THE ENTIRE AMOUNT OF SUCH INVESTMENT.” Similarly, a brochure for the railroad states, “Although we are very hopeful and optimistic that Pacific Northwest Railroad will become a reality, we must state loud and clear that this proposal is not a ‘sure thing’
or a ‘slam dunk.’ ”

There are other warning signs that this is a scam as well. Instead of standard diesel engines, proponents tout that trains will be “pulled by locomotives powered by liquid hydrogen and emit nothing except water and limited amounts of heat,” never mind the fact that hydrogen fuel has not been employed to pull freight trains. Or maybe, more glaringly, that one of the companies involved, Pacific Charter Financial, misspells their own name on their website.

Why should we care if fools and their money are soon parted? Because this train obsession is getting in the way of actual governance. Instead of putting coastal dependent industrial lands to use, these lands too often sit gathering weeds waiting for the day when trains come back. Instead of converting old, unused railroad tracks to bike paths, train fans throw fits because “someday” these right of ways will be needed for rail. And instead of developing a modern vision of a working Humboldt Bay, like potentially becoming a hub for floating offshore wind development (something actually in the works), we are forced to rehash the same fights.