"BIG TICKET". Is Alberta to Alaska Railway Port Mac's Sugar Savior? The railway may become a reality in 2022 if Sean McCoshen of A2A Railway has his way. By Dennis Anderson, AP, Jan. 3, 2019.

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Alaska Railroad signs initial deal for link to Canada and Lower 48

James Brooks , Anchorage Daily News, June 27, 2019. Link.

JUNEAU - The Alaska Railroad Corp. board of directors has approved an agreement with a firm seeking to link Alaska and Canada by rail. The board voted unanimously Thursday morning to approve the deal, which does not require the state-owned railroad corporation to fund the project.

Construction is estimated to cost $13 billion, according to a presentation given to the Alaska Legislature earlier this year, and is years away. Thursday’s arrangement deals with initial permitting, land acquisition and preliminary planning.

An Alaska Railroad train crosses a bridge over Ship Creek on Sunday, June 16, 2019. (Bill Roth / ADN)

Under   the agreement, the Alaska-to-Alberta Railroad Development Corp. — known as A2A Rail — receives an “exclusive right” to operate a cross-border railroad and the ability to use Alaska Railroad’s existing network as it seeks to build a railroad line between Alaska and Fort McMurray, Alberta. The agreement calls for the Alaska Railroad and A2A rail to obtain a right-of-way across state land between the Canadian border and the end of the railroad’s existing track. The two groups will draft a cost-sharing agreement.

“A rail connection between Alaska and Canada and the rest of the United States is a project that has been talked and dreamed about for close to a century,” said Alaska Railroad President and CEO Bill O’Leary in a prepared statement. “Completing that connection has amazing potential for Alaska and this agreement between the Alaska Railroad and A2A Rail is an important first step to get the project underway.”

Sean McCoshen, co-founder of A2A Rail, said by phone that Thursday’s agreement will unlock right-of-way negotiations which in turn will encourage President Donald Trump to approve a presidential permit needed for the railroad. Gov. Mike Dunleavy has already asked the president to issue a permit, and so has the Alaska Legislature.

With a permit in hand, the project becomes much more attractive to potential shippers, and with shipping agreements in hand, A2A Rail would have an easier time finding financing.

The project is being driven in part by demand for an oil-shipping route out of the Canadian province of Alberta, where bitumen and oil sands are mined. Those materials are then processed and converted into usable oil.

Environmental protests and opposition from local and Native groups   has prevented the construction of pipelines   out of the province, leaving producers with few options for export. With pipelines unavailable, some producers have taken to exporting oil by train, using thousands of tanker cars to reach refineries or ports.

Larry Persily, a journalist who has also worked on oil and gas issues for the state, federal government and municipalities, is skeptical that an Alberta-to-Alaska rail link will solve this problem or even be built.

In   a recent opinion column, he wrote that the cost of transportation over such a link “could eat up at least one-third of the value of the oil,” making the route uneconomical. He referred to   a 2015 study   that indicated a railroad shipping 1 million barrels of oil per day — double the volume currently shipped through the Trans-Alaska Pipeline System — would have to charge between $15.44 and $21.41 Canadian per barrel.

By phone Thursday, he said, “I think it’s economically nutsy, but we have a history of that here in Alaska.”

In his view, pipelines can and will be built in the years required for permitting and constructing a railroad. As an example, he pointed to   last week’s decision by the Canadian federal government to continue the expansion of the Trans Mountain pipeline between Alberta and the Pacific Ocean via British Columbia.

“Coming from Alberta, exporting oil is part of this, but it’s not the only part of this,” McCoshen said.

As he explained, a rail link could allow Alaska ports to compete with overloaded Lower 48 container-ship terminals. Shipping times are shorter, and the great-circle route between Asian ports and California already passes near Alaska.

When it comes to oil, “there’s a 5 million barrel-per-day supply problem in Alberta,” he said, and he expects the prospective rail link to be able to carry 1 million to 1.2 million barrels per day.

McCoshen said A2A employs “40-45 full-time people going on the development side,” and “through contracting, there’s hundreds more," including former Alaska Lt. Gov. Mead Treadwell.

“It’s a massive project. It’s a massive undertaking,” he said.

Correction: A previous version of this article incorrectly reported that the agreement includes rights to a long-planned installation at Port MacKenzie. While A2A has discussed completing the rail extension to the port, that arrangement is not part of Thursday’s deal.

Alaska to Alberta Railway (A2A) Briefing to Alaska Senate Transportation Committee.
February 28, 2019 
Direct link:
http://www.akleg.gov/basis/get_documents.asp?session=31&docid=11262 .

More stories about this project:

"BIG TICKET". Is Alberta to Alaska Railway Port Mac's Sugar Savior? The Alberta to Alaska railway may become a reality in 2022 if Sean McCoshen of A2A Railway has his way. Published by Dennis Anderson, Anchorage Press, January 3, 2019 .

Governor asks Trump for permit needed to connect Alaska railroad to Canada, Lower 48. Alaska Gov. Mike Dunleavy is asking President Donald Trump to grant a presidential permit to extend the Alaska Railroad into Canada, supporting a Canadian company seeking to blaze a new path for Asian-bound products. Author: Alex DeMarban, Anchorage Daily News, April 1, 2019 .

Update on Alberta to Alaska Railway Project. Mead Treadwell, former Alaskan Lt. Governor, presents A2A Railroad project to connect Alaska Railroad to Canada and Lower 48. Transcript of Briefing. Location: World Trade Center, Anchorage, Alaska. April 17, 2019.  

Alaska to Alberta railway project to connect Alaska with Canada -- and potentially -- the lower 48 could create thousands of jobs. Interview with former Lt. Gov. Mead Treadwell, now a consultant for A2A. By Liz Raines, KTVA Channel 11 Alaska News, July 10, 2019 .

Commentary: Is the Alaska Railroad on track to the "Lower 48?"   By Darren Prokop, Professor of Logistics in the College of Business and Public Policy at the University of Alaska Anchorage. Published by Freight Waves, November 9, 2019 .