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

RELATED TOPICS: ALASKA | CANADA | CRUDE OIL
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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.

NEWSWIRETrains News Wire

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