Trump bolsters A2A

Says will issue presidential permit for Alaska-to-Alberta import and export line

Gary Park

for Petroleum News

From the time it was floated five years ago, the latest version of an Alaska-Alberta rail link has been openly scorned by many and quietly given the brush off by others.

For 130 years, various proposals have been made for such a project to bolster imports and exports in Alaska and Western Canada and have just as quickly evaporated in the absence of financial backers.

But the idea keeps resurfacing as a serious plan to move oil and other resources to and from the Pacific Basin through Alaska.

The current proposal involves a venture by the Alaska to Alberta Railway Development Corp., A2A.

In mid-2019 A2A announced it had reached an agreement with the Alaska Railroad Corp. to develop a joint operating plan to upgrade and extend the 515-mile Alaska Railroad mainline between Seward and North Pole.

Apparently the mega-undertaking has attracted the attention of President Donald Trump, who announced on Sept. 25 that he would issue a presidential permit for the A2A project, a permit which the president signed Sept. 28.

The plan involves building a 1,600-mile track linking Anchorage, the Yukon, the Northwest Territories and northern Alberta at a current cost estimate of C$22 billion, with Alberta’s oil sands bitumen exports being carried by rail to Interior Alaska, than feeding into the trans-Alaska oil pipeline for shipment to the Valdez terminal.

The current startup date is the end of this decade.

Just first step

Now A2A must embark on a U.S. review process and obtain the necessary licenses and permits for interstate railroad commerce.

On the Canadian side A2A faces an environmental impact assessment, followed by Canadian federal, provincial and territorial approvals.

An official in Alberta Premier Jason Kenney’s office said he welcomed Trump’s participation in a railroad that could give his province access to Asia and other Pacific Rim markets for oil sands bitumen, along with grain, ore and other containerized goods.

A2A President J.P. Gladu said Trump has helped push the project through one important gate.

“You need certain lines of support from government ... and this is one of those great moments for A2A, signaling that this project is indeed a real project.”

Gladu told the Globe and Mail that offering wide-ranging freight service, with ultimate deliveries to the Lower 48, adds incentives for financial backing.

A2A founder Sean McCoshen said construction of the line would generate more than 18,000 jobs for Canadian workers and provide a “new, more efficient route for trans-Pacific shipping and thereby link Alberta to world markets.”

It would also sidestep the option of building a pipeline to a Pacific terminal, setting the stage for another protracted and likely losing battle before Canadian regulators and courts and the uncertainty of gaining approvals from Canadian governments.

Two months ago, A2A commissioned the engineering firm HDR to start detailed land surveying along the Alberta segment of the line.

McCoshen said the survey activities mean “we are now officially ‘boots on the ground’ in Alberta,” combined with completion of a feasibility study.

Gladu said A2A is studying ways to allow Indigenous partners to acquire equity stakes, while exploring debt and equity financing options.

HDR is working in partnership with Lawson, an Indigenous-owned and controlled surveying firm, opening the door to new economic development opportunities for Indigenous communities in Canada and Alaska, he said.

McCoshen estimated that A2A could unlock C$60 billion of cumulative gross domestic product through 2040.

- GARY PARK