Efforts being pushed by shippers and the state of Oregon could lead to a major expansion of Southern Oregon's railroad tunnels — and a corresponding increase in business traveling through those tunnels.

Efforts being pushed by shippers and the state of Oregon could lead to a major expansion of Southern Oregon's railroad tunnels — and a corresponding increase in business traveling through those tunnels.

Bob Ragon, spokesman for the Coos Siskiyou Shippers Coalition, said an application for a federal grant to improve tunnels on the tracks connecting the Rogue Valley and Northern California is in the works. An earlier grant application for tunnel work near Glendale is being reviewed in Salem.

The grant applications coincide with increased rail operations in Southern Oregon.

"A lot of the rail activity we're seeing through Roseburg is from trains originating in Medford, Grants Pass and Glendale, picking up cars along the way," Ragon said. "It shows there has been some improvement in forest products shipments."

Late last year, the shippers backed a $4 million request for Connect Oregon IV money that would provide funding to raise tunnel heights on four tunnels near Glendale, a community just north of the Josephine-Douglas county line.

"The Connect Oregon money would allow high-capacity boxcars, which are taller, to be used on the Siskiyou Line," said Ragon, who anticipates Connect Oregon awards will be announced in late summer or early fall.

The second, and more expensive, project would make regular runs between Weed, Calif., and the Rogue Valley economically practical. Regular runs were discontinued in 2008 during a dispute over freight fees between RailAmerica unit Central Oregon and Pacific Railroad and shippers.

Since then, the parties have settled their differences and are pushing for a $10 million Transportation Investment Generating Economic Recovery (TIGER) grant proposal by the Oregon Department of Transportation and California's Siskiyou County.

The grant would be as part of a $12.5 million Siskiyou Summit rehabilitation project. CORP has agreed to kick in another $2.5 million to complete tunnel, rail, tie and bridge work on right-of-way owned by Union Pacific.

ODOT and Siskiyou County have filed a pre-application for the grant to refurbish the Siskiyou Summit with financial backing from Roseburg Forest Products and Timber Products. Douglas County commissioners are considering financial support, but have yet to vote on the matter.

ODOT has asked its Golden State counterpart, Caltrans, not only for letters of support, but also to file as a co-applicant, while assuring the California agency it would have "no fiscal obligations tied to this request."

The final grant application is due March 19 and grants are expected to be awarded in early summer.

"There is $500 million available nationwide," Ragon said. "When it comes to TIGER grants, we're playing with the big boys."

The region has seen three TIGER grants in recent years.

A $2 million grant from TIGER II funded 42 fast-charge stations for electric vehicles along Interstate 5, allowing recharging outside metropolitan areas. During that same round of funding, the Coos Bay Rail Line received $13.6 million to refurbish the link between Coos County and Eugene. Last year, $2.5 million was awarded for roadway improvements along U.S. 101, just south of the Oregon-California border.

ODOT says improvements on the Siskiyou Line would renew and improve interstate freight rail options and business competitiveness, helping to retain and increase regional employment in the manufacturing and wood products industries.

A study by geotechnical and environmental consultants firm Shannon & Wilson noted the state's Southern Region has the third-highest truck volume and "the lowest density rail corridor," ODOT noted.

"All the freight coming here is either by air or on a truck," said Mike Montero, a member of ODOT's Freight Advisory Committee. "Having a rail-based freight alternative provides the region with some options."

With each railroad freight car equaling the capacity of 3.5 trucks, Montero said a rail option would reduce congestion and provide more viable options for lumber and other heavy commodities shippers.

"Beyond that, there's the reduced emissions from trucks, and safety implications," Montero said. "Rail doesn't work for everybody — it's not nimble enough for just-in-time freight users. But for other types of bulk freight, the implications are pretty obvious."

Montero said the federal grants are both extremely competitive and the dollars awarded often are less than needed to complete a project.

"It's pretty rare that you get full funding and that leaves the applicant with the potential that it may be required to make up the difference," Montero said. "In the event you are successful in obtaining the grant, the other question becomes, who backfills the grant? But if you don't apply, the answer is always no."

Reach reporter Greg Stiles at 541-776-4463 or email business@mailtribune.com.