Alberta's oilpatch gets a rare gift — a U.S-backed $22-billion export line to tidewater via Alaska
Posted on September 28, 2020
Could a pipeline follow through this corridor too?
Author of the article:Yadullah Hussain
It may well be his last few weeks in office (at least according to the public polls), but U.S. President Donald Trump just gave Alberta oil producers a gift.
Amid his increasingly-deranged conspiracy theory tweets over the weekend, he broadcast a more presidential tweet on Friday: “Based on the strong recommendation of @SenDanSullivan and @repdonyoung of the Great State of Alaska, it is my honor to inform you that I will be issuing a Presidential Permit for the A2A Cross-Border Rail between Alaska & Canada. Congratulations to the people of Alaska & Canada!”
Dan Sullivan is a U.S. senator serving Alaska, and Don Young is a Congressman serving the American last frontier. The U.S. president has been sweet on the Canadian oilpatch before, having approved TC Energy Corp.’s Keystone XL pipeline project which had been rejected by the previous president Barack Obama. If it proceeds, the railway project could serve as another important outlet for Alberta’s oil producers who have struggled due to lack of pipeline capacity. However, railway lines are deemed to be a more expensive way to transport oil compared to pipelines.
The proposed 2,570-kilometre A2A railway aims to transport bulk commodities such oil, grain and ore in addition to containerized goods, and aims to develop “a new railway connecting the Alaska Railroad and Alaska’s tidewater, to northern Alberta.”
The project is expected to cost $22 billion, of which $7 billion will be built in Alaska and $15 billion in Alberta, according to the company.
Construction will begin near Fairbanks, where the Alaska Railroad currently ends, and move south and east through Alaska, across into Yukon, the Northwest Territories, and into Alberta.
The proposed route will connect the North American railway network, via Northern Alberta to the existing Alaska Railroad network and Alaska’s deep-water ports.
“This is a world-class infrastructure project that will generate more than 18,000 jobs for Canadian workers at a time when they are most needed, provide a new, more efficient route for trans-Pacific shipping and thereby link Alberta to world markets,” A2ARail founder and chairman Sean McCoshen said in July, as he announced commissioning an engineering firm to start a detailed land survey along the Alberta segment of the railway’s proposed route.
“The new rail line will create new economic development opportunities for a wide range of businesses, communities and Indigenous communities in Canada and Alaska,” the chairman said. “We estimate that A2A Rail could unlock $60 billion CAD in additional cumulative GDP through 2040 and lift household incomes by an average of 40 per cent.”
The company’s president is Jean Paul Gladu, who served as the president and CEO of the Canadian Council for Aboriginal Business from September 2012 until April 2020.
The Alaska–Alberta Railway Development Corporation (A2A Rail) is privately owned and funded by its McCoshen, who the company says has spent more than US$100 million through the early phases of the project.
“As the project progresses, it is anticipated that A2A Rail will seek investment from infrastructure funds, Sovereign Wealth groups, and private investors. Additionally, A2A Rail is looking into several government issued grants and loan guarantees in both the U.S. and Canada to assist in providing the risk capital needed to develop the railway,” according to the company website.