The railroad yard was operated by the Southern Pacific Railroad Company between 1887 and 1986 as a locomotive fueling, maintenance, and railcar repair facility near downtown Ashland. Most buildings were removed from the yard in the 1980s. A small portion of the railroad yard is currently leased to the Central Oregon and Pacific Railroad and is used on occasion for switching and storing railcars.
Environmental investigations in the 1990s revealed that soil and groundwater in portions of the railroad yard are contaminated with petroleum hydrocarbons, polycyclic aromatic hydrocarbons, lead and/or arsenic. Contaminant levels in some areas of the property are higher than DEQ's cleanup standards for human health if the property were to be used for residential or commercial uses.
In 2006, Union Pacific proposed to excavate about 35,500 cubic yards of contaminated soil to meet DEQ's criteria for unrestricted residential use. DEQ did not approve the 2006 plan due to concerns raised by many Ashland residents about the use of trucks to haul contaminated soil on city streets. In 2013, Union Pacific submitted a new cleanup plan that called for excavating about 18,700 cubic yards of soil and using railcars to haul the contaminated soil to an approved landfill. Union Pacific delayed implementation of its cleanup plan until Ashland modified a deed restriction on the property in 2016.
In February 2017, DEQ approved Union Pacific Railroad's plan to begin cleanup at the site to remove most of the contamination and enable Union Pacific to sell all, or a portion, of the property if it chose to. The bulk of the work was supposed to begin in the summer of 2018.
In 2017, the U.S. Environmental Protection Agency updated its standards for benzo-a-pyrene, which is one of the main contaminants in the soil at the Ashland Rail Yard. Benzo-a-pyrene is one of a number of polycyclic aromatic hydrocarbons, a type of chemical that is found in coal and petroleum products and can be formed when coal, oil or gas are burned. Other contaminants in the soil on the site include lead, arsenic and a type of thick fuel commonly called Bunker C.
Union Pacific notified DEQ in December 2017 that it planned to withdraw its cleanup plan in light of the new standards. DEQ agreed that the updated standards would change the requirement for cleanup for benzo-a-pyrene contamination. Under the new standards, there are no unacceptable site risks for benzo-a-pyrene that would require cleanup for commercial or urban-residential use. However, several heavy metals, petroleum products, and petroleum byproducts remain in the soil and groundwater at levels that may pose a health risk to people working or living on the rail yard.