Unidentified coal companies appear to be behind a new backdoor effort to acquire the North Coast Railroad Authority’s right-of-way between Eureka and Willits and rehabilitate the defunct railroad, all so they can export coal to Asian markets via the Port of Humboldt Bay.
State Senator Mike McGuire calls this development “one of the largest environmental threats to hit the North Coast in decades.”
On Aug. 16, a mysterious, newly formed corporation called North Coast Railroad Company, LLC, filed a pleading with the Surface Transportation Board. Ostensibly a proposal to submit an “Offer of Financial Assistance” to rebuild the line, the filing makes a number of surprising claims.
For one, the 14-page filing, submitted by a pair of Chicago attorneys, says NCRCo. is “capitalized to the tune of $1.2 billion” and has “thoroughly-developed plans” to acquire and rehabilitate the dilapidated rail line between Humboldt Bay and Willits. Once complete, the company says, this newly reconstructed railroad will move “high-volume shipments” between the San Francisco Bay Area and Humboldt Bay.
The document does not disclose what these “high-volume shipments” might contain. Nor does it identify anyone involved with the corporation.
The pleading prompted an incredulous response from the North Coast Rail Authority (NCRA), the state agency that spent
30 20 years trying to resuscitate that same stretch of railroad but is now, under McGuire’s leadership, working to develop the Great Redwood Trail, a multi-use pathway extending 320 miles along the agency’s right-of-way.
NCRCo., the opaque corporate entity, appears to be trying to derail this rails-to-trail effort by submitting a last-minute “Offer of Financial Assistance” (OFA) to rebuild the line. Federal law holds that the Surface Transportation Board must give priority to maintaining or restoring a rail line wherever possible.
The NCRA says it’s just not possible on this stretch of railroad, which runs through the geologically unstable Eel River basin. In an Aug. 20 letter replying to NCRCo.’s Chicago attorneys, NCRA counsel Charles Montagne says the company and its so-called plans appear to be “a hoax or some sort of ruse.”
The company was incorporated in Wyoming on Aug. 6, just 10 days before its filing with the STB. The “organizer” was identified as InciFile.Com LLC, a Texas-based corporation whose accreditation with the Better Business Bureau has been revoked. The only address listed for NCRCo. is a Wyoming office suite that’s home to some 250 LLCs, according to Montagne’s research.
“In short,” he says in his letter, “there is no indication in NCRCo.’s organizational filings … that NCRCo. has any assets, rail plans, personnel, or existence, other than as a legal fiction.”
Reached by phone on Thursday, Montagne said no one from NCRCo. has responded to his letter.
Is this indeed all just a ruse, as Montagne suggests?
Rep. Jared Huffman doesn’t think so. In a conversation with the Outpost on Wednesday, the congressman said he’d spent the previous 24 hours “basically nonstop on this,” investigating who’s behind the effort and what they’re after. The answer, he said, is coal companies in league with the Crow Tribe in Montana.
McGuire said the same thing. “The people behind this toxic coal train have been operating in secret, meeting with local officials here on the North Coast,” he said. “They’ve been operating anonymously through the LLC in Wyoming, and they are intentionally hiding behind these corporate laws that hide individuals behind these types of toxic operations.”
The Crow Tribe’s 2.2 million-acre reservation in Southern Montana is home to billions of tons of coal deposits in the Powder River Basin. The tribe has signed numerous agreements with coal mining companies from Wyoming, Utah and Montana.
“They’ve always been all about coal,” Huffman said. “They are out of step with many of their fellow tribes, and it’s just sort of this Faustian deal that they cut.”
There were rumors that the Wiyot Tribe was involved as well, but Huffman said he’d spoken with Tribal Administrator Michelle Vassel earlier on Wednesday and gotten assurances that they’re not involved.
“She told me unequivocally they are not supporting this,” Huffman said. “They will not be part of it. But what I don’t know is whether they were part of some initial exploration of this.”
In an emailed statement to the Outpost, Vassel said, “We have not received a proposal or accepted a proposal related to coal. I am not sure how the Tribe’s name became part of this discussion but I have had a number of phone calls about it.”
First District Supervisor Rex Bohn said he met with some of the interested parties. About six months ago, he had dinner with a group of people who said they were interested in restoring the rail line. The group included Utah State Senator David Hinkins.
“They had some Native Americans they were partnering up with,” Bohn said. “I know that they met with the Wiyots quite a bit. They were talking about just opening the rail line. … They thought it’s usable. They had some freight ideas that they could get out of here.”
Asked if they identified what type of freight they intended to ship, Bohn said, “They held it pretty close to the chest, I thought. Rightly so.”
Told that McGuire and Huffman had identified the interested parties as coal companies, Bohn said, “They did talk about clean coal cars, you know, completely covered, completely domed and everything.”
Asked what he thought of the proposal at the time, Bohn said he kept an open mind. “You want to listen to everybody because you don’t want to kick anybody out,” he said. “You want to see if it will have any basis to it whatsoever.”
A phone message and email to Senator Hinkins were not returned. Nor was an email to the Crow Tribe.
NCRCo.’s filling with the Surface Transportation Board is defiant about the company’s secrecy. “NCRCo need not disclose the precise merits of its plan or the continuing public need for rail service on the Line until tendering its [Offer of Financial Assistance],” it says.
The company disputes the NCRA’s estimated costs for rehabilitating the line and says, “It would be premature to conclude that the Line could not be restored and become economically viable. Such arguments only establish that the current owners of the Line [NCRA] lack the funds and will to take an entrepreneurial risk on the Line as NCRCo would do … .”
Huffman is skeptical.
“It is hard for me to imagine anyone so naive as to think that this could ever succeed,” he said. “I mean, I truly think that you will see time travel and teleporting before you will see a coal train exporting out of the Port of Eureka. … But I’m not going to take that for granted. This is one of those do-whatever-it-takes-to-kill-it priorities and believe me, the wheels are already in motion.”
McGuire said he and his colleagues in the Senate plan to introduce legislation that would ban state investments into any rail infrastructure associated with coal.
“We’re going to introduce this bill here in the coming days,” McGuire said. “We fully expect full-throated litigation from multiple sources to be able to block this.”
Like Huffman, McGuire expressed doubts about the viability of this endeavor, but he also pointed out how serious the threat is.
“This toxic train would run along the Russian River and the Eel River, which is the main source of drinking water for just under 1 million residents,” he said. “It’s also home to some of the most sensitive ecosystems on Earth, along with endangered species.”
California banned coal-fired power plants for good reason, he added. ”Coal is the dirtiest and most damaging source of energy out there, and it’s also the No. 1 cause of global warming. It’s the No. 1 contributor to our climate crisis. And I’m here to promise you, right now, that no matter how many billions this anonymous corporation may have to throw at this project, it’s not going to happen. The Great Redwood Trail is going to win the day. The Great Redwood Trail is going to continue to move forward.”
Mitch Stogner, executive director of the NCRA, called NCRCo.’s ploy “absurd.”
“According to our best estimates, the cost to restore the line would exceed $2.4 billion and [the line] would remain unreliable due to the regular slides and washouts, especially along the environmentally sensitive Eel River Canyon,” Stogner said. “And of course that does not include whatever billions it would cost to upgrade the Humboldt Bay Harbor to transport coal. All of this is widely known, and exactly the reason the state of California has directed us to focus on the Great Redwood Trail — a mission our board is working hard on. We suggest this LLC stop the secrecy and do their homework.”
McGuire agreed that the costs are prohibitive, but in the same breath he said he’s not taking any chances. “It is not going to happen — and I will tell you, we are going to fight them like hell every step of the way.”
Others are lining up to fight, too.
“When I heard that this was a credible thing, I obviously wanted to activate every possible avenue of opposition,” Huffman said. The congressman reached out to the board of SMART, the Sonoma Marin Area Rail Transit, which owns the southern section of rail line running from San Francisco Bay north to the Sonoma-Mendocino County border.
“I think you can absolutely guarantee vigorous opposition from the SMART board,” Huffman said.
Local environmental groups are also up in arms. Alicia Hamann, executive director of Friends of the Eel River, said, “Coal trains running through the Eel River canyon to Humboldt Bay would poison the river, the bay, and the entire region. It would devastate the progress that FOER and so many others have made in restoring Eel River salmon and steelhead.” Noting the environmental cost of fossil fuels, she added, “Humboldt County should have no part in that.”
“Regardless of who is behind this, we’ll fight at every turn to keep coal trains from coming to Humboldt Bay,” said Jennifer Kalt, executive director of Humboldt Baykeeper. “The pollution from mile-long trains coming through Eureka and Arcata would be horrendous. And burning coal will worsen the climate crisis and add to the mercury contaminating our fish.”
Tom Wheeler, executive director of EPIC, was more blunt. “Fuck coal trains,” he said. “We are going to fight this with everything we’ve got.”
If NCRCo. ends up submitting an Offer of Financial Assistance, as the company has indicated it will, the Surface Transportation Board is charged with performing due diligence on the financial plans. If the company clears that hurdle, it will still face bureaucratic and legal obstacles, such access to SMART’s portion of the rail line and the legislation being prepared by McGuire and others.
But public opposition may play a key role, too.
“This community is going to have to rally,” McGuire said.
He noted that the North Coast has been the center of some of the largest environmental battles in the nation, from Redwood Summer to a rally against Big Oil to protect the coast from offshore oil drilling.
“And now is the time to be able to put the nail in the coffin of coal once and for all … ,” he said. “We know that we’re going to be successful but it’s going to take all of us working together here in the weeks and months to come.”
- NCRCo’s filing in opposition to the NCRA’s exemption request
- The NCRA’s response letter to NCRCo’s attorneys, with supporting documents
- It’s Official: Sen. Mike McGuire Introduces ‘Great Redwood Trail Act’
- ‘Great Redwood Trail Act’ Passes State Senate Unanimously; Assembly Left to Wrestle With All the Details
- Will the Great Redwood Trail Act Pass Before the NCRA Goes Off the Fiscal Cliff?
- Up Against Legislative Deadline, McGuire Scales Back ‘Great Redwood Trail’ Plans in Hopes of Getting Bill Past Assembly, Governor
- The Bill Formerly Known as ‘The Great Redwood Trail Act’ Has Passed the Assembly
- END OF THE LINE: Gov. Brown Signs McGuire Bill to Eviscerate the North Coast Railroad Authority, Start Trail Planning
- In Key Step for the Great Redwood Trail, NCRA Board Votes To Railbank the Line from Willits to Samoa
- ‘A Transformational Day’: McGuire Announces That $16.5 Million for the Great Redwood Trail Has Been Added to the State Budget