National Post (Latest Edition)

A boost for Al­berta’s mag­i­cal es­cape hatch

Alaska to Al­berta Rail­way

- Colby Cosh


On Sunday, the pres­i­dent of the United States, while hors­ing around on Twit­ter in his fa­mil­iar fash­ion, an­nounced that he in­tends to is­sue a pres­i­den­tial per­mit for a rail line run­ning from Alaskan sea­ports to the Cana­dian bi­tu­men cap­i­tal, Fort Mcmur­ray, Alta. If you were ex­pect­ing this news to pro­voke ju­bi­la­tion in Al­berta, you might have been a lit­tle dis­ap­pointed. Clear­ance from the U. S. ex­ec­u­tive is a nec­es­sary piece of the puz­zle now be­ing pieced to­gether by the Alaska- Al­berta Rail­way Cor­po­ra­tion, but un­for­tu­nately, it’s a thou­sand- piece puz­zle. And so far there is an ab­sence of en­thu­si­as­tic helpers to put their hands to the work.

The Alaska- to- Al­berta ( A2A) rail con­cept has been around in var­i­ous forms for decades. It doesn’t take a ge­nius of en­ter­prise to won­der why there is no freight link from south- cen­tral Alaska’s tide­wa­ter to the rest of the con­ti­nen­tal econ­omy. Be­fore the Al­berta oil­sands came into full flower, north­ern rail was con­sid­ered as a pos­si­ble method of en­cour­ag­ing slug­gish min­ing de­vel­op­ment in the Yukon. To­day it of­fers the prospect of ma­rine ship­ments of Al­berta bi­tu­men be­ing al­lowed to elude the Bri­tish Columbia coast­line, which is guarded by for­mi­da­ble myr­mi­dons of statute, reg­u­la­tion and First Na­tions bands.

In short, it’s Al­berta’s mag­i­cal es­cape hatch. We may not get along with our fed­eral govern­ment, but there’s friend­lier one right next door! Only 2,570 kilo­me­tres of steel away from Fort Mac!

Noth­ing like A2A ever got off the ground in the past, be­cause it’s an ex­pen­sive es­cape hatch rel­a­tive to pipe­line con­struc­tion. If you built the rail­road you would need long- term con­tracts with cus­tomers who could be sure that there would be few new pipe­line links com­ing to Al­berta to un­der­cut them. In that sense, now would be the per­fect time for in­vestors to strike, as the po­lit­i­cal risks of pipe­line con­struc­tion have be­come over­whelm­ing enough to con­vince any­one.

But oil prices aren’t play­ing ball. The Van Horne In­sti­tute’s 2017 “pre-fea­si­bil­ity” study of a ver­sion of the rail­road es­ti­mated the re­quired trans­port costs per bar­rel as be­ing in the $ 15-$ 21 range, as­sum­ing one mil­lion bar­rels per day of traf­fic. Th­ese are bar­rels of undi­luted bi­tu­men we’re talk­ing about, and the spot price of re­fined syn­thetic crude in­side Al­berta right now is only about $40. A2A will need ded­i­cated op­ti­mists to both in­vest in and sup­ply its dream.

Th­ese would prob­a­bly in­clude fed­eral and provin­cial gov­ern­ments — the con­sor­tium has never de­nied that. But it is go­ing ahead and lay­ing down its own ta­ble stakes. In July, per­haps an­tic­i­pat­ing that se­nior Alaskan politi­cians would be able to squeeze a per­mit out of Pres­i­dent Don­ald Trump, A2A an­nounced it was com­menc­ing with a to­po­graphic sur­vey of the favoured route be­tween Delta Junc­tion, which over­looks Alaska’s ports, and Fort Mckay, the planned ter­mi­nus on the north­ern Al­berta side. ( On the Alaska side, the ques­tion of how to build the cur­rently nonex­is­tent “last mile” of track to tide­wa­ter, and where it ought to go, re­mains un­re­solved.)

Sean Mc­coshen, the pre­sid­ing ge­nius of A2A, boasted at the time that, “The start of sur­vey­ing ac­tiv­i­ties means that we are now of­fi­cially ‘ boots on the ground’ here in Al­berta. Com­bin­ing that with our progress on com­plet­ing our fea­si­bil­ity study, it is safe to say that A2A Rail has ad­vanced well beyond the early idea first in­ves­ti­gated by the Van Horne In­sti­tute into a ma­ture in­fra­struc­ture pro­ject only months away from break­ing ground.”

He then listed the next steps of A2A, which in­volve ap­proach­ing In­dige­nous com­mu­ni­ties along the route, firing up en­vi­ron­men­tal im­pact as­sess­ments in two coun­tries, and so­lic­it­ing cus­tomers. I ques­tion whether an in­fra­struc­ture pro­ject of Promethean, his­toric scale can prop­erly be called “ma­ture” be­fore th­ese bagatelles are dis­pensed with, but I’m not a busi­ness­man. Per­haps it’s the boots that count.

What strikes me in 2020 is that the old ques­tion — why don’t we have a rail link from Alaska to Al­berta? — can be given two dif­fer­ent ac­tors’ line read­ings. It can mean, “Why don’t we go ahead and build the damn thing al­ready?” Or it can mean, “Wouldn’t min­ing com­pa­nies and big oil have built this them­selves with the change from their couch cush­ions if it made sense?”

 ?? JOE KLAMAR / AFP / Gett y Imag es files ?? An Alaska-to-al­berta (A2A) rail pro­ject, an ex­port route for the oil­sands, “will need ded­i­cated op­ti­mists to both
in­vest in and sup­ply its dream,” Colby Cosh writes.
JOE KLAMAR / AFP / Gett y Imag es files An Alaska-to-al­berta (A2A) rail pro­ject, an ex­port route for the oil­sands, “will need ded­i­cated op­ti­mists to both in­vest in and sup­ply its dream,” Colby Cosh writes.
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