A boost for Alberta’s magical escape hatch
Alaska to Alberta Railway
NOTHING LIKE A2A EVER GOT OFF THE GROUND IN THE PAST. — 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?”