A nation-building project for the new government

(Editor`s note:  This article from the Financial Post shows how the oil industry keeps on trying to get their product to "tide water"!)

 nation-building project, endorsed by the Assembly of First Nations, should be the top infrastructure, trade and First Nations priority for the new Trudeau government.

It is the proposal to build a railway from Alberta to Alaska, supported by native groups along way, that could carry 1.5 million barrels a day from the oil sands to the super tanker port in Valdez Alaska.

There are several main objectives, as enunciated by Prime Minister Justin Trudeau, that this railway would meet:

• It is supported and will benefit First Nations who have already granted the social licence for the easement from Alberta through Yukon and to Alaska.
• The Prime Minister opposes Northern Gateway and this project will provide a lower cost and approved alternative to sell oil to Asia and not ship oil along the B.C. coast doing so.
• This project would be the most important trade bonanza in the nation’s history, especially given President Obama’s rejection on Friday of the Keystone XL pipeline.  Trudeau supported the Keystone initiative and this would be a replacement. Alaska’s governor and legislature fully supports the oil-by-rail proposal. Oil volumes through Valdez have declined dramatically due to the decline in Alaska oil production.
• Finally, this is not another hockey arena or road to nowhere or make-work project. This is wealth-creation infrastructure and is “shovel ready.”

Alberta commissioned a pre-feasibility report, but its results have been delayed due to the changes in government leadership. This year, Governor Bill Walker of Alaska invited newly minted Premier Jim Prentice to Juneau to demonstrate their state’s support for the project, but Prentice was defeated.

G7G Rail in Vancouver (Generating for Seven Generations) devised this 2,400-kilometre rail project. It will include First Nations groups in Alberta, B.C. and Yukon Territory, as well as Alaska Native corporations, as partners.

In an interview three years ago, G7G CEO Matt Vickers explained its origin: “We found these studies by Alaska and Yukon done in 2005 and 2007, we knew that Valdez faced declines from the North Slope oil fields and we knew that the B.C. pipelines, and the port in Kitimat, were opposed. This railway was an obvious solution.”

“To ensure this could be a real project, we began to knock on the doors of all the First Nations and tribes in Alaska along the route. We finished doing that in July [2012], getting letters of support from all. Plus, in July, I got support from the National Assembly of First Nations in the form of a resolution representing all 633 chiefs in the Assembly.”

Only one First Nation group has said no to the concept, but the railway can be re-routed around its territory.

In a February letter urging the project to Prentice, Chief Ronald Kreutzer, Fort McMurray #468 First Nation, wrote about delays: “The railway project aligns with everything that the First Nations have been asking for … We ask the Government of Alberta to further their pre-feasibility study investment and fund the comprehensive feasibility study so we can make this Nation Changing Project a reality for the benefit of all.”

Initial estimates are that a single-track line could be built for US$12 billion and double-track, US$16 billion. Alberta pre-feasibility study is still under wraps, but the next step would be to do a full-blown engineering and feasibility study.

Cost of transport per barrel at high volumes would be $8 a barrel, but the shipping distance from Valdez to Asia is three to four days shorter, compared to Vancouver or Kitimat, making overall costs in line with pipeline proposals to those cities.

A twin-tracked railway would also provide a needed alternative route for Canadian potash, grains, lumber, metals, minerals and other exports. The rail line could return from Valdez bringing equipment, supplies and water from the coast to the oil patch, at lower costs compared with current modes and distances. This makes the railway more valuable to the region.

This megaproject would meet a number of national objectives: liberate a stranded resource, bypass pipeline politics, help aboriginals and the country’s most dynamic, job creation region, and get up off the mat.

This requires the type of courage and vision that built the Canadian Pacific Railway more than one century ago.

G7G’s oil by rail project represents the single most important, and most pragmatic way, to underpin Canadian living standards. This is not about infrastructure. This is about nation-building.

( End of article)