Officially, the Napa Pipe plant is only "idle," but all the signs point to a permanent shutdown.

The week after pipe production ceased in July, Oregon Steel, Napa Pipe's parent company, announced it would build a more modern pipe mill in Portland, costing $35 million.

The numbers work against Napa, said Ray Adams, Oregon Steel's chief finance officer. "The new mill actually has a greater capacity than the pipe mill in Napa. It will be more cost-efficient," he said in an interview this month.

Oregon Steel, which makes steel in Portland, will save $40 a ton by not having to ship it 500 miles to Napa to be turned into pipe, Adams said. New technology at the Portland mill will lower production costs another $60 to $100 per ton, he said.

Napa Pipe is yesterday's technology, Adams suggested. The new plant will use coils of steel, not plates, enabling it to make pipe sections of greater diameter and length with fewer workers, he said.

The Portland pipe mill will trump Napa in another big way, Adams said. It won't be in California.

Taxes are higher in California, so are workers' compensation rates. "It goes on and on and on," Adams said. "California is a difficult place to do business."

By expanding in Oregon, the company will receive $2.5 million to $3.5 million in reduced taxes and utility costs as part of an incentives package worked out by the Portland Development Commission.

Hearing that Oregon Steel was thinking of expanding, a partnership of private and public entities began courting the company in April, said Colin Sears, a commission coordinator.

"We pitched them as to what we could do," Sears said. "What we try not to do is take companies here for granted."

Local and state government offered to help Oregon Steel get permits for the new mill "in a timely manner," Sears said. The new mill should be in production by late 2005.

Unlike some places, Portland doesn't turn its nose up at a steel operation, Sears said. "It will be a lot of machines and computers," not the dirty industry that some might imagine, he said.

For a half century, the Napa pipe mill was both technologically innovative and highly profitable. In the late 1940s, it invented a method for making large-diameter steel pipe that became the world standard.

The plant's location, hundreds of miles from the nearest source of steel, was not ideal, but its reputation for quality made it a money-maker for Oregon Steel, and Kaiser Steel before it.

As recently as May, 2003, the company's then-CEO called the Napa mill a "cash cow," according to a story in The Oregonian.

But the past few years have been hard times for pipe mills. Orders for new natural gas and oil pipelines have dropped dramatically, while competition from foreign producers has increased.

The U.S. once had 10 plants that made large-diameter pipe. Today, with the closure of Napa Pipe, there are two.

Oregon Steel is expecting business to pick up, perhaps in 2005, which is why the company is building a new mill in Portland, Adams said. "There is a shortage of natural gas (facilities) in the U.S.," he said.

Oregon Steel also owns majority interest in a Canadian pipe mill in Camrose, Alberta, that uses the same technology as Napa Pipe. Indeed, the equipment in Camrose was fabricated in Napa by Kaiser Steel.

The Camrose pipe mill created a formidable competitor north of the border, observers says. Given the currency exchange rate and Canada's lower personnel costs, the Canadian plant likely has significantly lower production costs than its Napa twin.

While pipe production isn't planned to resume at Napa Pipe, it could occur under certain circumstances, Adams said. The opening of the new Portland mill is at least a year away. In the meantime, if the company got a major order from a customer for whom Bay Area production had a logistical advantage, Napa Pipe could be restarted, he said.

Otherwise, Napa Pipe and its 152 acres could go on the auction block. A decision about the future "could be tomorrow, it could be in six months from now, it could be a year from now," Adams said.

More than a dozen developers have called to express interest if the Napa acreage is put up for sale, Adams said. They have been told to bide their time.

In the meantime, Stephen Orndorf, Oregon Steel's Napa-based sales manager, is free to entertain short-term uses of no more than 60 to 90 days.

One caller wanted to know if the big pipe yard could be used for RV storage, Orndorf said. Another inquired about running a motorcycle driving school. No leases have yet been made.

Several former Kaiser Steel and Napa Pipe employees accuse Oregon Steel of not doing enough to keep the Napa mill competitive against international rivals.

"The company failed to keep it up to date," said Bud Williamson, who retired as director technology from Napa Pipe in 1996. "There were many, many things that could have been done at the Napa plant to keep it up to date."

Joe Powers, a mechanical engineer who worked 27 years for Kaiser Steel, then consulted for Napa Pipe, is bitter about the shutdown. Had Oregon Steel managed things differently, it need not have happened. "I think they were largely responsible for the collapse," he said.

Powers isn't optimistic that Oregon Steel will reopen the Napa mill. "Once you turn a mill down, it's almost impossible to reconstruct it. The people are gone. The resources are gone. Everything you need to run a mill is gone," he said.

Jim Maggetti, a former Kaiser vice president who served on Oregon Steel's board of directors, said the shutdown of Napa Pipe is part of a trend.

"Heavy industry hasn't been doing very well in California the last 20 to 30 years," he said. The Bay Area was once dotted with steel fabricators. Most have disappeared.

The Napa mill's heyday coincided with the rapid growth of America's natural gas and oil industries, Maggetti said. Now, just as the interstate highway system is largely complete, so is America's oil and gas distribution system, he said.

Maggetti keeps in touch with Williamson, who now lives in Texas. In an August letter, he commiserated with Williamson over Napa Pipe's closure.

An era of good jobs and great challenges has ended, Maggetti said, yet pipe mill veterans will always take pride that a technology invented here became the world standard for more than a half century.

"It was a hell of a run," he said.