At the moment just a red line on a map, but in the future...

While the Enbridge hearings prepare to ramp things up again in February for their 2013 calendar of hearings, the province of Alberta is apparently starting to formulate a plan B to move it's bitumen to world markets and for the most part it would seem that the province of British Columbia will be but a bit player in that alternative option.

As we mentioned back in November, Alberta is looking a little harder into an option proposed by a First Nations based group known as G7G (Generating for Seven Generations) which has been working on a transit route that would see Alberta's resources move from the Fort McMurray oil sands to a shipment point in Alaska.

A route which would make any further discussion on the Enbridge pipeline rather moot.

(A full review of our Enbridge hearings file can be found here)

The rail link to Alaska project received another review this weekend, this time from the Edmonton Journal which offered up this examination of the proposal and the reception it is receiving from the Alberta government.

Sometime in January, the cabinet of Premier Alison Redford will decide whether to invest  some 10 million dollars into a study on the project, the Alberta portion of a 40 million dollar feasibility study on the proposed 2,400 rail line which would move bitumen by rail to Delta Junction, Alaska where it would them flow through the Trans Alaska pipeline on to Valez, Alaska.

A single track line line from For McMurray to Alaska would cost some 8.4 billion to build and would carry 1.5 million barrels a day, a double track line ups the cost to 10.4 billion but would carry five million barrels a day.

The key to the project moving forward is the fact that G7G suggests that they have received First Nations approval along the transit corridor to Alaska, something that the Enbridge proceedings have shown isn't likely at the moment (or any time soon) across the route to Kitimat.

In a National Post Article from November, Diane Francis outlined how the movement of bitumen from Alberta to Alaska, could in the end grow to be much more than just a way to move oil based resources.

Some of the key logistical points from the article are:

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.

Shipping oil to Asia is cheaper, and would be two to four days shorter, from Valdez. “People are surprised at that, but if you look at the map, the mileage is dramatically less across the Pacific Ocean from Valdez compared to Kitimat. 

If the railway was double-tracked Canadian potash, grains, lumber, metals, minerals and other exports could be taken to port for shipment around the world.

At the moment, the project is as they say in the article, just a red line on a map.

However considering the atmosphere over the Enbridge discussions of late and the less than welcoming approach of the BC Government on the transit of Alberta resources file, moving the shipment point north is starting to look more and more like a realistic prospect.

One which clearly change the dynamic of development not only in Northern British Columbia but along the Pacific Gateway, whether the terminus is Kitimat or Prince Rupert.

Alaska to Alberta rail option could have an impact on Port of Prince Rupert

The ongoing debate over the Northern Gateway pipeline may in the end see the project put back on the shelf, but the fallout from that prospect could also have an important impact on other aspects of the transportation grid in and out of the Port of Prince Rupert.

With the Northern Gateway panel hearing much in the way of opposition to the planned pipeline to Kitimat, a possible alternative plan to ship Alberta's bitumen to Asia's hungry energy markets is starting to take shape.

A rail pipeline if you will, 2400 kilometres across from the Fort McMurray extractors, to a port terminal at Valdez, Alaska.

Making use of rail cars to transport Alberta's product to world markets.

The proponents of the project known as the Unifying Nations RailCo Initiative is the latest plan of the G7G, Generating for Seven Generations, and according to their most recent press release, the proposed project has  apparently secured the approval of Alaska First Nations, as well as the initial support of First Nations across northern BC, the Yukon and into Alberta.

Something that Enbridge has had more than a few problems in securing, in the prelude to the Northern Gateway development.

It's not the first time that a rail pipeline has been suggested, in fact CN offered up the solution a few years back in 2009, with the terminal at the time suggested for the Port of Prince Rupert.

Not much has been heard of that plan in the noise over the Northern Gateway debate, but one imagines it could be a workable plan B for Alberta, which is determined to get its resources to world markets. The prospect of an oil by rail plan, on the back burner while the Northern Gateway discussion moved forward.

National Post-- CN idea a winner for oil sands
Sun News-- Crude oil rides the rails as pipeline projects flounder
CBC-- Shipping crude by rail needs no regulatory approval, PM told
Vancouver Sun-- Pipeline protests spur companies to consider shipping oilsands crude by rail

Railroads already use rail cars to transport bitumen to destinations other than British Columbia. So the project it seems is a workable solution with CN currently working on plans to double its oil shipments for next year.

There are of course detractors to the pipeline by rail project, including a few observers of  the oil industry itself.

Still, the main stumbling block for the CN option whether it be crude or bitumen, is that it would require terminal development at Prince Rupert.

And at the moment the prospect of bitumen shipments on the north coast is still very much a hot issue for local opponents, whether it be out of Kitimat or Prince Rupert.

The G7G proposal seems to count on that backlash to continue, using it as well as an ownership stake for First Nations, as their main discussion points in pushing their rail plan forward.

The rail plan to Valdez would of course remove that opposition, good for Alberta, not so much perhaps for the Port of Prince Rupert or the for the region and its growing reliance on the Port for economic development.

A key part of the Alberta to Alaska proposal is this little addition to the prospectus, which clearly has goals much larger than just shipping bitumen.

If the railway was double-tracked Canadian potash, grains, lumber, metals, minerals and other exports could be taken to port for shipment around the world. 

 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.

Indeed, opening up Valdez as a viable port for Alberta's raw resources could have a rather large impact on shipments of any number of other bulk goods out of Ridley Terminals, the Grain Elevator and the resource shipment plans for the proposed Watson Island project.

Fairview Terminals most likely would not feel the impact of such a second rail line across Northern BC, the infrastructure required for container service is costly and the future of the container service at the Port of Prince Rupert it would seem is fairly secure at the moment.

But when it comes to the shipment of bulk goods, a second northern route could be a major competitor to the offerings through Prince Rupert.

The National Post provided a helpful review of the potential for the second rail option to the north, it no doubt will make for interesting reading for any number of stakeholders.

Some other reviews of the G7G plans can be found below.

CBC Daybreak North-- Oil train to Alaska from Alberta could eliminated debate...
PRWeb-- A Railway from Canada to Alaksa: Ready to Be Built in Six Years

Mining.com-- A Northern Gateway workaround that could ship a lot more oil to the coast