A2A rail

An ambitious project to build a 1,700-mile rail link from Alberta to Alaska, and the Matanuska-Susitna Borough in particular, is set to receive its first federal government approval.

This is the required U.S. presidential approval for a rail crossing of the U.S.-Canada border, which would be east of Tok near where the existing Alaska Highway passes into Yukon Territory.

Last Friday President Donald Trump sent out a tweet – his favored method of communication – that he intended to issue the approval. Mead Treadwell, a former Alaska lieutenant governor and A2A’s vice chair for Alaska, hands the credit to the Alaska congressional delegation for boosting the idea with the president.

“Rep. (Don) Young and Sen. (Dan) Sullivan really pushed this through,” Treadwell said. Mat-Su region legislators helped too. “Sen Shelley Hughes and Rep. George Rauscher helped hugely, as well as Gov. Dunleavy,” Treadwell said.  

The project has a long way to go, however, quite literally. Environmental approvals will be needed in both the U.S. and Canada, although the Alaska segment will be able to take advantage of existing infrastructure by tying into the existing Alaska Railroad near Fairbanks. The Alaska Railroad has also done route planning and studies for an 82-mile extension from North Pole, near Fairbanks, east to Delta. An A2A railroad would benefit from that.

From the Fairbanks area shipments on the A2A rail could be sent south on the Alaska Railroad to Port MacKenzie, on upper Cook Inlet. A rail spur connecting the Alaska Railroad to Port MacKenzie would have to be completed. It is about half built.

Besides 82 miles of rail needs North Pole to Delta a 200-mile rail segment is needed from Delta to the U.S. border. About 1,600 miles of rail is needed in Canada. The proximity of the Alaska Highway will offer some access during construction, however.

The environmental issues will focus mainly on A2A’s plan of carrying heavy Alberta crude oil in bulk oil trains. That idea will face close scrutiny by regulators in Alaska and Canada, as well as opposition from conservation groups in both nations.

The bigger challenge is the economics. With world oil demand and prices sharply down, and questions as to whether when and even if the market will fully recover, the financial underpinning of shipping Alberta oil to Pacific markets through Alaska is doubted.

However, the project would offer a clear alternative for consumers and industrial customers in Interior Alaska and the North Slope who now must shipped on barges and container ships to Southcentral Alaska from the U.S. Pacific Northwest, and then to the Interior by rail.

Alaskans have always supported a rail link to the Lower 48 states, but they should be cautious about the prospects. “I don’t believe Trump’s ‘permission’ (for the border crossing) overrides wetlands or air quality or water quality reviews on the U.S. side,” said Larry Persily, a former federal energy official who now teaches at the University of Alaska Anchorage.

Persily is skeptical of the project: “The international community would chain themselves to the tracks at the notion of oil sands bitumen traveling in rail cars over the Canadian sub-Arctic. Not to mention the terrible economics. What will the empty tank cars haul back to Alberta?”

One idea for southbound shipments, however, is ore mined in Alaska and sent by rail to markets in southern Canada and the U.S. There are several mineral prospects in eastern Interior Alaska and Yukon Territory along the route of a railroad, and Yukon also hosts several producing mines.

In Canada, Christine Myatt, spokesperson for the office of the premier, said the Alberta government supported the news. “The Government of Alberta is glad to see the approval of the A2A rail project in the United States/ We support the development of trade corridors that can unlock new markets for Alberta’s products,” she reporters in Canada.

A2A said the project would generate thousands of jobs for Canadians if it is constructed. “This is a world-class infrastructure project that will generate more than 18,000 jobs for Canadian workers at a time when they are most needed, provide a new, more efficient route for trans-Pacific shipping and thereby link Alberta to world markets,” said Sean McCoshen, founder of A2A.

The company said in July that it had commissioned engineering and survey work in Alberta for the project.

Alberta’s government funded a conceptual study 2015 on a rail line between the province and Alaska in 2015, which said a railway would be challenging to build but would provide an alternative to pipeline transportation for oil. A2A began work on the line in 2015. Other companies that have investigated similar ideas.

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