Is it feasible to carry bitumen from Fort McMurray, in Northern Alberta to tidewater in Alaska and from there to world markets via a combination of rail and pipeline? A study released today by the Van Horne Institute, based at the University of Calgary, suggests that it is. This study is published by the Van Horne Institute with a Project Team including Shirocca Consulting, AECOM, Generating for Seven Generations (G7G), the University of Alaska (Fairbanks), and Michigan Tech Research Institute.
The proposed railway between Fort McMurray and Delta Junction, Alaska is comprised of 2,440 km of single, standard gauge bi-directional heavy haul track. The track is upgradable to a double track configuration that would add substantial capacity. The study identifies rolling stock equipment and manpower requirements for both a 1.0 million barrel per day (MBPD) and 1.5 MBPD bitumen volume.
The study recognizes that the proposed railway passes through, or comes in close proximity to, a number of areas that are environmentally protected, support migratory and/or sensitive or endangered species, or are important for wildlife and biodiversity, especially along major river valleys. The Environmental Approval and Permitting process will be extensive and complex and is defined in the study.
The study includes a detailed analysis of capital and operating cost estimates, as well as a business case analysis. The capital cost ranges between $28 and $34 billion for 1.0 MBPD to 1.5 MBPD. The defined route for the railway will create an opportunity to transport to North American and to world markets, mineralization deposits that to date, are locked in. The metallic mineral potential within the project corridor is estimated to generate in place gross metal values between $333 and $659 billion over 30 years of operation.
Consultation and meaningful involvement and participation of First Nations is essential to the success of this project. Our partners in the project, G7G, made contact with all First Nations leadership and tribes directly affected by the project through information sharing and project presentation meetings.
Peter Wallis, President and CEO of the Van Horne Institute observed that, “This analysis presents an alternative routing for the transportation of bitumen from Western Canada to world markets. While the timing for the completion of this initiative includes further feasibility analysis, environmental approval and permitting and construction at a significant cost, it is a nation- building project. Transportation is an enabler of any economy and this initiative will unlock the petroleum and mineral potential of the north in both Canada and the United States of America. We hope that governments, First Nations and industry will take the time to consider all of the opportunities that this study identifies”.
The Alberta to Alaska Railway Prefeasibility Study can be found here.
The Van Horne Institute is recognized within Canada and internationally as a leading institute of public policy, education and research in transportation, supply chain and logistics, and regulated industries.