Alaska newspapers published an insert on glossy paper not long ago with full-color images of what the future “Alaska to Alberta Railway” might look like, with big locomotives pulling a freight train across the north.
The insert did not include details on exactly what freight is envisioned as the economic foundation of the new 1,500-mile railroad from Alberta to Alaska, except for a brief mention of opening global markets to mineral and energy exports. Ships would dock near Anchorage and carry cargo to destinations across the Pacific.
The current cost estimate is $13 billion to $15 billion, a range that is probably only going to go up. It does not include connecting the future railroad from Delta to North Pole, where it would tie into a future extension of the Alaska Railroad.
Gov. Mike Dunleavy, in a speech to Republican activists last week, filled in a lot of the details on what the exports might be.
I understand why the insert used vague terms because the specifics mentioned by Dunleavy—tar sands oil from Alberta and coal from Wyoming—have the potential to create regional, national and international controversy during this period of global alarm about climate change.
Dunleavy, who ridicules worries about climate change, doesn’t recognize the political risk that lies ahead when the railroad extension becomes portrayed worldwide as a pollution friendly Alaska dream.
Plus, there are economic and political questions about whether there will be a market for Wyoming coal and Alberta tar sands. Increases in natural gas production and renewable energy may make the rah-rah talk in Alaska irrelevant.
The railroad is being promoted by a private firm founded by Sean McCoshen, an investment banker who spends his time in Vancouver, Winnipeg and Los Angeles. McCoshen says the company has spent $60 million on the railroad idea so far. The company says it intends to fund the entire project from Delta to Alberta with private funds. Perhaps the state would be on the hook to get the railroad to Delta.
“We’re being contacted by various states and provinces to use Alaska as a transshipment point for resources,” Dunleavy told the GOP activists in Fairbanks.
“Well you’ve got states like Wyoming—and the Powder River coal field there—they’re having a harder and harder time shipping their product off the coast of California, Washington and Oregon because the politics of those states have changed so radically, so quickly they’re making it very very difficult to ship resources.”
“Some of these states are talking about filing antitrust and interstate commerce suits,” he said.
“Alberta for the past four years could not move their tar sands,” he said.
There has been opposition in British Columbia and elsewhere over tar sands development because the process releases far more climate-change emissions that other energy sources. There are also supporters of increased exports through B.C. by pipeline.
Dunleavy claims the obstacles to development are arguments for the railroad extension to Alaska, which strikes me as a peculiar brand of wishful thinking.
“The word is that the Canadians and others are just about there with the investments. And if we build a 1,500-mile railroad, what’s going to happen is they’re going to ship their tar sands up through Alaska as a trans-shipment point because we are going to be the only sovereign on the Pacific Ocean in North America, north of Mexico, that is still resource friendly,” he said.
Former Lt. Gov. Mead Treadwell, a consultant on the rail project, has been more circumspect about the potential freight business, suggesting that this is not just about tar sands.
“A railroad has a diverse set of clients and customers. It could be passengers, it could be containers, it could be ore concentrates, it could be other resources like potash or sulfur carried in cupboard cars,” he told the Yukon News in July. “A pipeline only carries one product in one direction, and so a railroad can carry products in both directions.”
Treadwell wrote in the Anchorage Daily News that the rail plan “will ultimately sink or swim in the global capital and transportation marketplace.” Climate change will be a major part of those calculations.
But Dunleavy doesn’t see climate change as a real issue.
The railroad would create “hundreds and hundreds and hundreds of jobs for Alaskans,” he said.
“You will be getting cheaper goods from Canada and the Lower 48 and they’re going to look to Alaska—north to the future—for their own futures because they’re having a hard time shipping this stuff out,” he said.
He said investors Outside “are looking at our politics” and seeing support for their ideas, while they are meeting opposition in parts of the Lower 48 where there are Democratic governors.
He said the political philosophy of “those on the left, that we don’t want to use this energy anymore. It’s too dirty. It hurts birds. Flowers wither. The list goes on and on and on. So at a time where technology has unleashed our ability to produce cheap energy for some of the poorest people on the planet, these people that purport to be the advocates for the poorest people are going to make it more expensive. They’re going to try to force them to use windmills at 60 cents a kilowatt hour instead of gas at a much lower rate or oil at a much lower rate.”
“So just at the time that we are unleashing America’s might when it comes to energy resources, the left is trying to kill it with all of this crazy talk about how it is bad for everything and everyone and in 10 years we’re all going to be on renewables, we’re all going to be in better shape, it’s going to be a better world,” he said.
Dunleavy’s oversimplistic account of this situation ignores the reality of climate change and the serious political obstacles that will emerge if a railroad plan materializes.