Page 9 - NorthAmOil Week 39

NorthAmOil COMMENTARY NorthAmOil

Trump’s railway line approval

raises prospect of new export

route for Canadian oil

US President Donald Trump has granted a permit for a railway line between

Alberta and Alaska, which could open up a new export route for the country’s
oil, but faces a challenging path forward

ALASKA-ALBERTA THE approval by US President Donald Trump The permit, which is required for projects
of a railway line connecting the Canadian prov- that cross a US border, will allow A2A to build,
WHAT: ince of Alberta with the US state of Alaska paves connect, operate and maintain railway facili-
US President Donald the way for opening up a new export route for ties at the Alaskan boundary with the Cana-
Trump has granted Western Canadian oil. However, the proposal dian territory of Yukon, in the Ladue River
a permit for railway faces a number of challenges and if it were to go Valley.
facilities at the US- ahead, it would not be the export route of choice The $17bn project still requires numerous reg-
Canada border in Alaska. for Alberta’s producers. ulatory clearances in both the US and Canada
Instead, new pipeline capacity would be pref- that would likely take years to be finalised. Its
WHY: erable for operators in Alberta’s oil sands. And backers hope to put the line into service by the
The infrastructure would such pipeline capacity is under construction, end of the decade.
connect Alaska to the but given the extent of regulatory and legal chal- The link is not being proposed for shipping oil
North American railway lenges facing such pipelines, there is still a pos- alone – it would also carry potash, sulphur and
network and potentially sibility that they will be derailed or significantly grain, which often back up at the Port of Van-
opens a new export route delayed. This has encouraged private sector play- couver, according to A2A’s vice chair for Alaska,
for Canadian oil. ers to consider other options. Mead Treadwell.
“The diversity of commodities helps reduce
WHAT NEXT: Presidential permit the risk,” he was quoted by Reuters as saying.
Moving Canadian crude Trump granted a presidential permit to the Alaska Governor Mike Dunleavy welcomed
through Alaska would be Alaska to Alberta Railway Development Corp. the presidential permit, saying the planned rail-
costly and may be a last (A2A) on September 29. He tweeted days prior way line provided “a clear alternative for Alas-
resort in the event that to issuing the permit that his decision was based kans to get access much-needed resources as
there is a lack of pipeline on the “strong recommendation” of US Senator well as bring North American goods to emerging
capacity. for Alaska Dan Sullivan and US Representative markets in the Pacific”. He went on to describe it
for Alaska Don Young. as a “game-changer” and was reported separately

Week 39 01•October•2020 www. NEWSBASE .com P9