Ambitious Alberta-Alaska Rail Link Proposed

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By Jeff Richardson - Fairbanks Daily News-Miner / jrichardson@newsminer.com

Story Created: Jan 3, 2013 at 8:51 AM AKDT

Story Updated: Jan 3, 2013 at 8:51 AM AKDT

FAIRBANKS — A Canadian business group is proposing a railway link between Alberta and Alaska as a possible route for bringing landlocked oil to market, but some of the details have been met with skepticism by trans-Alaska oil pipeline officials.

The proposal, being pushed by a business consortium called G Seven Generations, would connect Fort McMurray, Alberta, and Delta Junction with a rail line. G7G is seeking $10 million from the Alberta government to help fund a $40 million feasibility study, according to an article in Wednesday’s Edmonton Journal.

If the rail connection were made, its backers envision that products from Alberta’s vast oil sands could be inserted into the trans-Alaska oil pipeline near Delta. The rail plan is an alternative to controversial efforts to establish a port for oil tankers in British Columbia.

Oil sands producers believe they can fetch a higher price for their product by delivering it to a port, which would make it available to a global market. According to a G7G summary, the project would be a collaboration between G7G and First Nations tribes along the proposed route, with construction starting as early as 2015.

G7G CEO Matt Vickers said in the Journal article that a single-track rail line would cost an estimated $8.4 billion, while a double track would cost $10.4 billion. A single track could carry as many as 1.5 million barrels of oil per day, while a double-track operation could deliver 5 million barrels each day to Alaska.

Vickers was unavailable to discuss the project with the News-Miner on Wednesday.

Although the project apparently has been discussed with Alberta leaders, not many details have made their way to Alaska. Alyeska Pipeline Services Company officials said they didn’t know much about the plan, which would at least quadruple the volume of oil in the pipeline from Delta to Valdez.

“I’m not aware of any serious discussions, certainly not anything that would rise to the level of infrastructure planning or anything like that,” Alyeska spokeswoman Michelle Egan said.

Egan said such a large project would be a huge challenge for Alyeska, which transports roughly 600,000 barrels of oil most days.

The most oil ever moved through the pipeline was about 2.1 million barrels per day in the late 1980s, and Egan said even that amount was beyond its original design parameters. She said an effort to send 5 million additional barrels of Canadian oil through the line per day “would be quite a stretch.”

Egan said Alyeska also doesn’t have the capability to move different products at different times, which would result in a mixture of North Slope crude and oil sands product being delivered to Valdez unless changes were made. An agreement to connect to the pipeline also would need to be negotiated, she said.

Contact Fairbanks Daily News-Miner staff writer Jeff Richardson at 907-459-7518. Follow him on Twitter: @FDNMbusiness.
 

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guest said on Thursday, Jan 3 at 11:27 AM

A refinery would be nice. I realize it's probably not cost effective. But it would be nice if our elected officials would fight for one to bring down our energy costs. They only seem to fight for the oil companies to have less taxes so they can make more money. If we don't fight for it now there will be nothing left once these resources are depleted.

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AK OLDMAN said on Thursday, Jan 3 at 12:17 PM

Funny that no one appears to have heard about this, G7G has been disusing it with First Nations and Alaskan Native Tribes for more than a year now. Think of the benefits this could mean to Alaska, a rail connection could bring products to Alaska and transport raw materials out a lot cheaper than truck or barge. Having been in the area for over fifty years I remember at least two serious proposals to make a rail connection the Canada in addition to this one. It is about time our State Government gave serious consideration to backing a rail connection to the lower 48 so we can safe.

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Alex said on Saturday, Feb 2 at 2:45 AM

This rail line could also open doors for passenger rail to Alaska to connect with the existing Alaska railway. Edmonton should be mile 0 for this line, I believe. Also, there is still the possibility of a tunnel to Russia if this line is built.

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