Oil by Rail proposal rolls into view once again

The weekend provided for a flurry of media reports that the path of Alberta oil may one day make its way to Prince Rupert, as a CN discussion paper from March made a bit of news for the cycle on Sunday.

Word that the Chinese energy giant CNOOC, through it's Canadian purchase Nexen had been nudging Canadian National towards putting in motion an oil by rail option, made for much conversation on twitter yesterday, as the social media outlet fed the quest for more information on the subject of how the oil companies of North America will seek to get Alberta's oil to world ( or in this case mainly Asian) markets.

The first story on the percolating thoughts of an oil by rail transit first came through the Canadian Press, where Bruce Cheadle's article gained wide review both at the Financial Post and other Postmedia newspapers across the nation.

From that point, his work was picked up by the national forums of the CBC, Globe and Mail and many other media outlets, all offering up more reading material for a Sunday morning.

With the Financial Post headline suggesting that the volume of shipments by rail could match that of the proposed and controversial Northern Gateway pipeline, the prospect of an oil by rail delivery system would clearly be a major change for the CN rail corridor through Northern British Columbia.

The main thrust of the Sunday review by way of documents obtained by Greenpeace, accessed through the Freedom of Information Act, revealed that internal memos highlighted that discussions on the proposal took place last March with Natural Resources Canada.

CN for it's part responded to the Canadian Press with the statement that no specific crude-by-rail project to Prince Rupert was discussed at that time.

However, the door it seems is not closed to that possibility in the future.  With CN stating to the news service that it will continue to explore new opportunities "to move crude oil safely and efficiently to markets." 

Any oil by rail project is one that could be  in place fairly quickly considering that Canadian railways already have the ability and permission to move oil by rail, with no large scale review required to commence the shipment process, (building an export terminal may be another story though).

Perhaps something that wasn't given much thought of a year ago,  Oil by rail transportation however, is now something that is under the micro-scope following the Lac Megantic tragedy of earlier this year.

The re-emergence of the oil by rail prospects for Northern British Columbia comes as the Northern Gateway pipeline proposal has received a less than enthusiastic welcome across Northern BC.

For many, the new talk of the rail proposal has all the makings of a Plan B, should the pipeline proposal fail to move forward.

Faithful readers of our blog and attentive news fans of the Northwest will know that the oil by rail proposal is not something new to the Northwest.

CN first made mention of it some four years ago, the project prospectus seemingly something that is sitting on a shelf somewhere in an office at the railway. But at the moment, according to CN's recent comments to the Canadian Press, it is not one that is an active development mode.

Some of our most recent reviews of the possibility of oil by rail can be found below:

May 2013-- Oil by rail option continues to generate interest in Canada and overseas
March 2013-- The Oil by Rail Option, CN builds infrastructure for the future
February 2013-- The next battle over Bitumen?
November 2012-- Alaska to Alberta rail option could have an impact on Port of Prince Rupert

With the Chinese energy giant CNOCC investing much of its interest into Alberta oil, it would seem obvious that they want to find some way to make sure that the oil makes it to their destinations of choice.

Whether it be through Kitimat, Prince Rupert or some other potential export route, such as the recent presentation of a Northern BC route to Valdez, Alaska.

Interestingly enough, CNOCC, last week we outlined that CNOOC/Nexen is looking to put its footprint on the North Coast, perhaps through development, or shared development of an LNG terminal in the Grassy Point region.

Should they find success in that ambition, the added prospect of moving oil through Prince Rupert would in effect, make the North Coast port the energy export hub for the company's North American investments.

So far on the North coast, the main coverage of the re-emergence of oil by rail has come from the CBC Daybreak North program. With the Sunday story from CP the subject of some investigation both through the morning radio program and in social media through a variety of twitter feeds, where some of the background on the story has played out.

Considering the discussion that even the mention of a March conversation has had on the topic, we imagine that the oil by rail proposal will make for much in the way of news coverage over the months to come, whether through twitter or on the various news platforms of the province and the Northwest.

We'll offer up some of those contributions to the discussion below.

PG Citizen-- Eco group rails against oil plan
CBC BC Almanac-- Rail Transport of Bitumen (Podcast audio from 30 seconds to 23 minutes)
CFNR-- Coastal First Nations reject crude by rail
Sun TV News-- Oil will be shipped by rail if not pipelines: Natural Resources Minister
Vancouver Observer--  Gateway sized oil by rail project planned for Northern British Columbia, Greenpeace has learned
Vancouver Sun-- Alberta oil will reach the coast, like it or not
Vancouver Sun-- CN is considering shipping crude oil by rail from Alberta to B. C.: memo

Selling the merits of the Port of Prince Rupert and the vision of its future

For those wondering how the Port of Prince Rupert gets its vision across to would be customers, an instructive video has been posted to  the website of the Transportation trade publication The Journal of Commerce.

Featuring the Port of Prince Rupert's President and CEO Don Krusel, the report provides a glimpse into some of the questions and issues that may face Port representatives as they go about selling the merits of the Port to world shipping companies and end users.

Such things as transit times, dwell times, bottlenecks in Chicago and other transportation and logistical questions make up the main talking points when it comes time for someone to decide where to unload their containers, questions that the Port of Prince Rupert seems to have all the right answers for.

The interview session recorded at the Trans Pacific Maritime Conference of 2009, touches on a number of questions about the Port and some of the perceived issues surrounding the Port, the video Q and A session helps give us a better understanding as to how the Port is being marketed to the world.

Journal of Commerce--- Don Krusel, Prince Rupert Port Authority (video)

Prince Rupert to be home of Beyond the Border Pilot Project

A project designed to improve the speed and efficiency of shipping international goods, through Canadian ports to American markets, has had its debut in Prince Rupert.

"The Beyond the Border pilot will introduce efficiencies in cross-border cargo movements, further enhancing Canadian commerce with our largest trading partner, said Don Krusel, President and CEO of the Prince Rupert Port Authority. "And as the site of one of the two Canadian pilot projects, we anticipate building on the Port of Prince Rupert's reputation as a world-class trade gateway." -- Port of Prince Rupert CEO Don Krusel, outlining a new pilot project and its expectations for the Port of Prince Rupert

The initiative is part of the Beyond the Border  agreement signed on December 7, 2011 between President Barack Obama and Prime Minister Steven Harper.

The project will feature Canadian Border Service Agency personnel inspecting cargo in Canada and then securing it with bolt seals for transit to market destinations around North America.

Incoming product will be assessed for risk by the Virginia based U. S. National Targeting Centre, which will identify those shipments at highest risk. CBSA personnell will then conduct examinations  for both security and contraband on behalf of the U. S. Customs and Border Protection Service. Information from Prince Rupert inspections will be shared in real time between the two Security services, making use of an electronic information system developed in the US.

That inspection process, culminating in the fixing of the bolt seals on the containers upon release of the shipment, will mean the product in transit will no longer require a secondary inspection at the US border. The result of which should be an even faster period of time of delivery than is already in effect between Prince Rupert and the US.

The details of the pilot project were outlined Sunday in a press release from the Canadian Border Services Agency. The pilot project in Prince Rupert will provide for an additional facet of the national Integrated Cargo Security Strategy.

The new process of shipment inspection out of Prince Rupert went into effect on October 1st and is a joint effort of both Canada and the United States, the cost of the pilot project is to be shared between both countries.


U. S. Politics Today-- Canada and the U. S. Announce Prosperity Enhancing Beyond the Border Project
Vancouver Province-- Pilot project aims to improve transport of goods from Prince Rupert to U. S.
Journal of Commerce-- US, Canada Launch Prince Rupert Pilot for Cross-Border Trade
Canadian Manufacturing-- Prince Rupert starts harmonized cargo screening
Government Security News-- Prince Rupert pilot program aimed at strengthening cargo security
Port Technology International -- Port of Prince Rupert pilots Canada-US cargo screening project

A Memphis view on the Port of Prince Rupert

With some 60 percent of shipments that travel through Prince Rupert bound for the US, there's an increased awareness and interest in what the Port of Prince Rupert has to offer customers below the 49th parallel.

Part of the process of attracting more trade through the Port is to show current users and potential ones as well just how the Port of Prince Rupert operates and how its advantages in location can benefit the financial bottom line of companies across North America.

To further that information flow the Port plays host to any number of visitors through the year, a recent visit from the Vice President of public policy of the Greater Memphis Chamber seems to have proven successful to spreading the word, that is if one catches up on Andre Dean's report back to a blog entry called Memphis in Motion, part of the offerings of the Memphis Business Journal.

Mr. Dean was one of a number of Memphis based residents who recently toured the Port and its facilities, to learn more about our entry point to North America that is directing a good number of traffic to their terminals in the American south.

CN has made Memphis it's main hub for logistics from the Port of Prince Rupert, a rail connection that races freight from the Prince Rupert waterfront to the heart of the American south in a most timely fashion.

From what appears to have been an enjoyable feed of  Fish and Chips at the Crest Hotel, to the more transportation orientated items such as border security and merchandise integrity, it seems that his visit to the Northwest proved both rewarding and educational.

We can get a glimpse as how others see the port and the impact that it is having on timely delivery of product to the US through this guest blog contribution to the Memphis publication.

Spectra Energy considers LNG shipments out of Prince Rupert

The line up of potential users of an LNG shipment point out of Prince Rupert seems to grow by the month, the latest one is Spectra Energy, which announced in a press release yesterday that it is considering enhancements to its pipeline grid in British Columbia to support liquefied natural gas exports out of Prince Rupert.

According to the release, the company is already involved in advanced negotiations on the project, calling Prince Rupert a great location.

The Spectra grid is connected to both Prince Rupert and Kitimat,  though those connections are smaller diameter lines and provide for far less capacity than a shipment terminal might require.

Towards the project of a shipment terminal Spectra would commit 4 to 6 billion dollars to its Western Canadian Infrastructure projects to support LNG exports, making use of a pair of properties that the company is developing in Horn River and Montney shales.

The Houston, Texas based company recently opened a processing plant in Dawson Creek, BC and is poised for further expansion in the provinces North East.

Spectra is just the latest of Natural Gas Exporters to express an interest in using Prince Rupert as a shipment point, last month details were released of the interest by Petronas, Malaysia's state owned oil and gas company in plans to develop a shipment point on Lelu Island near Ridley Island.

From the North Coast Review Archive

July 2012-- LNG plans dusted off for Prince Rupert

Pinnacle Pellet Plant plans moves forward slowly

The latest proposal for waterfront development is proving to be a contentious issue for residents on the West side of the city, as the Pinnacle Renewable Energy Group's plans for a pellet terminal and storage facility provides for a vocal debate over what should, or should not be developed on the Prince Rupert waterfront.

Pinnacle's plans as outlined in a comprehensive prospectus, would provide for a storage facility and shipping terminal along the shoreline near where Prince Rupert's grain elevator once stood, providing for the first real industrial use of that are since Prince Rupert Grain relocated to Ridley Island in the eighties.

It's perhaps because of that absence of use that has provided for an attachment to that section of the waterfront, residents on that side of town, having had little industrial development take place until the recent rejuvenation of Fairview terminals into what is now the container port.

Since then, the volume in both numbers and audial content on the waterfront rail lines has caused for controversy on the west side, residents weary of train horns tooting and rail car couplings coupling and all of that.

Now, much to their horror it would seem the prospect of yet more development on that stretch of waterfront is sending some of them to the verbal barricades as it were.

The debate which at times gets heated, offers up any number of potential problems that opponents can think up, some of which may or may not be grounded with actual proof. The scope of the argument ranges from health concerns over potential pellet dust, to property value declines, though in the latter category, some of the opponents perhaps have an over inflated view of their property values.

Many of the concerns are listed on a webpage called Pellet Free Neighbourhood, where opponents of the project list their talking points on the issue.

Based on the idea that the city is now a major shipping port,  those opponents may not be on the firmest ground on the debate, with the planned expansion of the Container port the rail corridor along the waterfront will remain as a marshalling yard for the foreseeable future.

Likewise, if historic precedent is any benchmark, the area in question with the Pinnacle proposal is indeed industrial, so it shouldn't really be a surprise that it would return to it's original use as opposed to the waste of scrubland it has become of late.

As it seems at the moment, the waterfront appears to have been divided into sections, the area from Kwinitsa to the east a more resident friendly space, the walking trail, the parkland, the cruise terminal and the Cow Bay redevelopment plans making it the destination for leisure and public use.

West of Kwinitsa, is for the most part a marshalling yard for CN, much of the land yet to be reclaimed for any other use from the historic fire on the waterfront of the seventies, the further you move towards Fairview the concept of it still being industrial seems still quite viable.

The City, as seems the case of late in anything contentious, appears to want to sit on a fence waiting for the winds to blow one way or another, offering up little evidence that it is fully committed to bringing any new industry to town.

The City recently issuing a call for input on the waterfront development, though we're not sure exactly how that would impact on the Port of Prince Rupert controlled space, which the city probably has little input or control over, other than offering up helpful suggestions.

Considering the city's less than solid financial footing these days, with a tax base that has declined over the last decade, one would think that the city would have an opinion or two on development and be inclined to welcome the same, at some point it would be seem that the city is in need of the growth and the benefits that could come from that.

Prince Rupert being a port city will either move forward based on the strength of its position in the world of shipping or it will stagnate again, the Pellet plant proposal would appear to be sending a message of confidence in the future as a shipment location.

The key to the financial well being of the city is to create an atmosphere of further development, sometimes that means that hard decisions and opinions have to be made and eventually accepted.

The file on the Pellet Plant proposal grows by the day, some of the reviews can be found below.

Invest Northwest BC -- Westview Wood Pellet Terminal

Northern View-- Pinnacle Pellet hosts forum on proposed Prince Rupert Pellet export terminal
Northern View-- Environmental Assessment for Pinnacle Pellet terminal in Prince Rupert ...
Northern View-- Prince Rupert Council asks for extension on pellet terminal environmental...
Northern View-- Prince Rupert Port Authority sends letter addressing wood pellet terminal ...
Northern View-- Major pellet shipping facility proposed for Prince Rupert waterfront
CFTK-- Proposed Pellet Terminal brings Concerns Over Waterfront Access
CFTK-- Pinnacle Renewable Energy Holds Open House in Prince Rupert
CFTK-- Rupert Resident Brings Pellet Concerns to Council for a Second Time