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Home / News & Reviews / News Wire / Canadian development company renews push for rail line linking Alaska to the lower 48 states NEWSWIRE

Canadian development company renews push for rail line linking Alaska to the lower 48 states NEWSWIRE

By Bill Virgin | April 8, 2019

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SEATTLE — Linking Alaska to the 48 contiguous U.S. is an idea that is resurfacing again with heavier Canadian support.

Canadian businessman Sean McCoshen told a recent meeting of the Alaska State Senate Transportation Committee that the company he co-founded and runs, Alberta-Alaska Railway Development Corp., has been working with consultants, the Alaska Railroad, Canadian native groups and others to build a line to the Yukon border, then south to interconnections with the Canadian National and Canadian Pacific.

McCoshen is CEO of the McCoshen Group, which he describes as a family office that owns 14 privately held companies ranging from housing, manufacturing, finance, retail, and rail. He’s also CEO of The Usand Group, a Winnipeg organization that links Canadian native groups with investors.

McCoshen is proposing not only the rail line but completion of a 32-mile spur to connect Alaskan Railroad with the Port Mackenzie marine-cargo facility. He said the development corporation is willing to finance the $125 million needed to finish it.

But even if that project is completed, it’s dwarfed by the cost and challenges of getting a line connecting Alaska and Alberta.

McCoshen used a figure of $17 billion for construction, and $4 billion in annual revenue to cover operating expenses and capital costs.

Where’s that money going to come from?
The driving force behind revisiting the idea of the rail line appears to be finding a way to get bitumen — found in Albertan oil sands — to export markets. McCoshen also believes he can get involvement from indigenous Alaska Native Corporations, Alaska tribes, and Canadian First Nations as owners.

That’s also part of the plan for a second group chasing the dream of an Alberta-to-Alaska rail connection. G7G Railway Corp. is proposing “a new, approximately 2,450 km long, purpose-built, state-of-the-art railway from the oil sands of Ft. McMurray and Peace River regions of Alberta connecting to the Pacific tidewater ports of Valdez and Anchorage, Alaska.”

Part of G7G’s thinking is that opposition to pipeline projects and petroleum export terminals in British Columbia will make it impossible to ever build them.

“With respect to handling petroleum products, the people of Valdez have the existing under-utilized supertanker port facility, the experience, the capacity and the desire to export petroleum products on behalf of G7G,” the organization’s website says.

The idea of linking Alaska with the Lower 48 by rail has been kicked around for decades.

In 1942, the U.S. Army Corps of Engineers lobbied for a rail line to Canada during construction of the Al-Can Highway. In 2005 the governments of Alaska and Yukon Territory launched a feasibility study of such a line. And when Alaska launched construction of its Northern Rail Extension near Fairbanks, it renewed speculation that groundwork was being laid, literally and figuratively, for a rail link to Canada and the rest of the U.S.

The impediments to such a project are as vast as the expanses the rail line would have to travel between Alaska and northern Alberta — the cost of building a line that might be at least 1,500 miles long in harsh and isolated terrain, the cost of maintaining it and generating enough revenue to pay for it.

“Alaska has long sought better surface connections to the Lower 48 states,” according to Alaska Gov. Michael Dunleavy. “Many studies on this matter have failed to move forward for lack of enough commodity carriage to justify the cost of construction and operation.”

The Alaska to Alberta proposal has already received some support from the governor, in the form of a letter to President Donald Trump asking to support a rail border crossing.

“Our state shares a long and strong transport relationship with Canada which includes one rail crossing now and several highway crossings,” Dunleavy wrote. “We see it in the geopolitical interest of both the United States and Canada to have the basic permission for this project to move forward.”

As for the cost, Dunleavy’s letter cites two market factors that make it worthwhile to consider the project. One is that Alaskan ports are closer to Asia and “container traffic is growing.” (Congestion on rail lines and at ports on the West Coast has also been mentioned.) The governor also says “there is enough prospective westbound cargo of mineral and energy commodities to justify long-term financing for the project.”

The next step, McCoshen says, is to negotiate a master agreement with Alaska Railroad to cover such items as permitting, financing, and leases.

22 thoughts on “Canadian development company renews push for rail line linking Alaska to the lower 48 states NEWSWIRE

  1. This project makes no economic sense in the 21st century. Add in the billions of dollars in lawsuits from indigenous peoples, environmentalists and just plain opponents of this and it makes even less sense.

  2. Thank goodness you naysayers have no influence on this project. The Golden Spike would have never happened either had you types been around then.

  3. Branden,

    The reason Alberta Crude sits is Alberta is not that it is uneconomic, but that there is no capacity to move it. Both CP and CN are pretty much at capacity, and there is no rail to water crude terminal on the Canadian West Coast, and minimal capacity on theUS West Coast. Both the Trans Mountain and Keystone XL pipelines are well past their due dates.

    Alaskan ports are year round operations. The fact that they already exist and would not need to go through an interminable permitting phase, do make them viable.

    EV’s will be a long time in killing oil demand. Long distance electric trucks and diesel locomotives are even farther in the future. And the electric commercial airliner is far off. Ships will continue to burn petroleum based fuels, although cleaner ones. So I suggest oil is here for quite a while, in spite of environmentalist dreams, unless people are willing to give up their vacations, favorite foods, cheap clothing, and most electronic devices.

  4. Actually BC Rail completed a rail line over one hundred miles north from the CN’s Port Rupert line. Operations on the northern end were abandoned because of little traffic; almost all the traffic on the extension was lumber. Driving up the Cassiar Highway you can see grading just south of Dease Lake but the expensive Stikine River bridge was never built.
    The interest in building through Alberta is to access the oil sands deposits around Ft. McMurray. As noted British Columbia’s socialists and environmentalists will fight to death to block any energy exports from a BC port (and possibly to black any Alaska rail connection too) so the alternative would be to export from Alaska. But I don’t think the project could be justified economically as there just isn’t enough traffic potential to justify the construction and operation of a very long railroad, not to mention the legal costs. The best route to an Alaskan port would be to rehabilitate the Copper River and Northwestern to Cordova but an attempt years ago to restore to a highway was blocked by the EPA as dumping rock into the Copper River was damaging the environment.

  5. Michael,

    If the market really wanted Alberta oil sands, there would be no problem building out midstream capacity. They could so even with the KSXL, and other PL projects being hung up or the capacity crunch on the west coast. Oil sands are expensive; upstream, midstream, and downstream in the petroleum market. The Permian basin, Eagle Ford plays in Texas have enormous amounts of cheap, easily accessible oil and gas that is closer to the Gulf than Albertas oil sands, for which the Gulf downstream market is equipped to refine. WTI doesn’t require dilution to flow like heavy bitumen.

  6. Everyone seems to be focusing on the oil sands…but you’re all forgetting the huge untapped mineral deposits that a rail line via either BC or Alberta would open up to mining, and with today’s technology it could be mined cleanly and inexpensively…if people had half a brain and foresight.

  7. Gerald, the environmentalists feel the same way about mining as they do about oil drilling. This won’t happen because people don’t have “half a brain and foresight”. Once the socialists take over everything that is good will disappear and we will have nothing left.

  8. Correct Braden, the Energy Return On Energy Invested (EROEI) for tar sands bitumen is very poor. Lots of energy required to extract and process it into a shippable form, and more energy required to refine it. Also to transport, but semisolid in covered hoppers or in heating coil equipped tank cars maybe not as bad as shipping nonpayload dilutent on both directions.

    Now if they’d consider nuclear generated process steam to extract and process the sands at the front end the upstream EROEI would be better. But the kind of massive nuclear buildout I favor would also be able to produce carbon neutral hydrocarbon fuels from the considerable CO2 dissolved in seawater from high temperatures nuclear generated industrial process heat. This could eventually make obsolete non-carbon-neutral petroleum without needing to convert the truck and automobile fleet to batteries. Which as pointed out is a slow and expensive process unlikely to scale. Got cobalt?

  9. This sounds like an insane idea. There’s no way that the traffic would justify the massive expense to build and maintain such an isolated railway. Ask the Russians about it. Siberia ad the Arctic are littered with half built or abandoned railway lines.

  10. Why planning to build from Fort McMurray or Peace River instead of using the already-graded former BC Rail Dease Lake extension? Wouldn’t this shave off a few hundred miles of track?

  11. Hey, those of us that lay asphalt for a living would love to have more heavy bitumen. Not all of it goes in your tank as fuel.

  12. The environmentalists will scream about this. They’ll claim that this is the first step in drilling and shipping oil form the Arctic Wildlife Refuge. Plus, what else besides oil is there to ship? The estimated cost is probably way underestimated like they all are and the revenue is overstated.

  13. As the Arctic melts this make sense. Who knows, in 100 years that area might be in a Florida land-scam mode. Maybe this guys is trying to get the land-scam started early.

  14. Connect Alaska to the mainland,then build a bride over The Bering Strait to Russia and build from Panama to the south across the Darien Gap to South America and finally the entire world would be linked by rail. I know it sounds unbelievable,but doing this would not be any harder than carving a right of way with picks and shovels in the 1860s for the transcontinental railroad. With the money that the US and other countries are spending on militaries that have the express intent to kill and maim people worldwide,this dream could become a reality.

  15. JF TURCOTTE – I had the same question as you. Perhaps the answer is found in the Dease Lake extension never happening.

  16. In my previous comment,I should have said that practically the entire world would be linked by rail,as five of the seven continents would be connected, with Australia and Antarctica still without outside rail connections. And,I guess,to better serve western Africa,a bridge over The Strait of Gibraltar would be necessitated instead of everything coming in through Egypt.

  17. This is an opportunity days past. This rail link would’ve have made sense to be built after WWII instead of today. Perhaps the fuel crisis of 73 could’ve been avoided with this rail link. As oil could have flowed by rail unimpeded from Alaska to the lower 48, lowering fuel prices as well… With the gradual phase in of EV’s. This link no longer makes sense. Yes Alaska is closer to Asia than any other part of North America, but would a port be viable that far north? Economically? Now for Alberta.. That gamble known as the oil sands has been a hindrance.. They need to just hang it up. Oil sands have not proven to be economically feasible, nor competitive. Hence all the oil sitting there now.. The capacity problem in Alberta exist due to the fact nobody wants heavy bitumen.

  18. If the Wright brothers had never visited Kitty Hawk and all the other inventors had just kept artificial wings tied to their arms when they jumped from high places,then this would have already been a reality before now.

  19. It all boils down to whether we want the environmentalists/socialists to succeed in cutting the world’s population and forcing poverty on the remainder or whether we want as many people as possible to become prosperous (middle class or richer).

  20. When Andeavor built the new refinery in Dickinson ND, they point blank asked if they would build another in Alberta to process oil sands. The answer was also point blank, “not interested”. If Canada wants to increase heavy crude output. they will have to export refined products instead. In other words, stop trying to getting others to refine it for you. If it’s uneconomic to refine it locally, why is it economic to ship it around the world instead?

    If a shipper of commerce offered me either barge from Valdez to Port Townsend at .10/pound and take 3 weeks or by rail at $1/pound and arrive in 1 week, anyone would take barge.

    While Valdez is closer to Asia, it is not economic for containers to take a more expedited route by rail across the Yukon. Shippers would rather pay less and let it take a few more days to get off the west coasts docks on the mainland.

    History shows that an Alaska route for rail can not use ship borne commerce effectively.

    Flagler thought Key West would be his port to bring South American commerce up the FEC. Shippers today would rather ship it the rest of the way to Jacksonville or New Orleans on the water. Slower, but way cheaper.

    People think that reconnecting the Texas Pacifico at Presidio, Texas to the rail port at Topolobampo on the Pacific Ocean will be an excellent way to bypass US west coast port congestion and get eastbound containers directly to midwestern factories. But that is asking Asian shippers to go a third of the way to Panama. Yet, it remains little used and is cut off at the Rio Grande. Not economic.

    That leaves precious metals. If someone can find rare earths that are cheaper to extract than in Brazil, then that would be (probably) its only chance of survival. Brazil is moderate in climate. The Yukon is not.

    The only working railroad in the Yukon in the foreseeable future is the White Pass. Now that Carnival Cruise has bought them out and they are restoring excursion service to Whitehorse, that will be as good as it gets for a long time.

  21. It too unaffordable today. It should of been built 100 years ago when labor was cheap, more per capita money to spend, no or minimal bureaucracy planning ahead required and no expensive machinery required. But it is now impossible to build that linkage line due to those costs have skyrocketed.

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