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Tom Jackson a partner in oil sands railway to Alaska proposal
I first met Revelstoke resident Ward Kemerer last snow season in a ski shop on Mackenzie Avenue.
My engineer brother was in town for skiing and he was looking for some equipment. On a TV screen in the shop, embattled former CP Rail CEO Fred Green was the subject of a news story; rebel investors had their knives out, eventually deposing Green.
I told my brother I’d met Green briefly. While on the job, I rode a vintage train from Revelstoke to Craigellachie to celebrate the 125th anniversary of the driving of the Last Spike. Green was on the train to help celebrate the milestone of Canadian nationhood, the culmination of epic visionaries with unyielding wills sewing the country together with steel.
Kemerer stepped up from near the wool socks and asked me how I’d met Green. When I explained, he told me of his dream: Building an oil railway from the Alberta oil sands in the Fort McMurray area to Alaska – not your average ski shop chat. He handed me a business card.
We’ve talked a few times over the months since then. Kemerer worked in the hydro-power field in the Revelstoke area, and was a key proponent for successful independent power projects in the region.
The plan is to link the $10-billion-ish, 2,600-kilometre railway to the existing Alyeska Pipeline network in Alaska, which would then transport the oil to the Valdez super tanker terminal in Valdez, Alaska.
G7G’s leverage is to give First Nations communities along the route running from northern Alberta, through B.C. and the Yukon a significant stake in the ‘Unifying Nations Rail Co.’ project, in addition to the economic and employment benefits of railway construction and operation.
Opposition from First Nations groups in B.C. has been key snag in plans to construct oil pipelines like the Enbridge Northern Gateway proposal through B.C., as has concerns over terrestrial and coastal oil spills.
“The greatest strength of our Alberta-Alaska railway concept is the support it has received from First Nations along the route,” said G7G CEO Matt Vickers. “Studies have already demonstrated that a rail link to Alaska is a viable alternative to the oil pipelines currently being planned through British Columbia. This approach is timely because it promises significant economic benefits to First Nations communities and all of Canada while avoiding many of the environmental risks associated with current pipeline proposals and related supertanker traffic off B.C.’s West Coast.”
G7G has been working behind the scenes, consulting with First Nations groups in B.C. and Alaska. Kemerer emphasizes it’s part of their “ask first” strategy.
I asked Kemerer lots of wrap-my-head-around-it questions. The key leverage is First Nations buy-in explains Kemerer. The railway creates the jobs that helps enable that. He believes the system will be much safer than a pipeline; a wreck would have a limited spill and the supertanker port is already there. He tells me they’d design oil super-trains that could compete with pipeline volumes – something just not possible on the existing CN and CP railways; they’re old and can’t carry the capacity and terminate in inappropriate, jammed ports that couldn’t handle the volume or the social opposition.
The Alaska pipeline system is undersupplied now, he explains; Alberta oil sands would top it up. The railway would cost in the $10–12 billion range, estimates Kemerer. The economic benefits to the oil industry would be made up in time; the whole thrust to the Pacific and Asian markets beyond is to diversify the market and avoid discounting caused by reliance on the U.S. market. Higher prices times years covers the costs. An influential and widely-reported International Energy Agency report on projected world energy supplies released last week found the U.S. will grow to be the world’s largest energy producer within a decade and will be a net exporter by 2030. This bodes worse for Canadian reliance on the North American market.
Last week, G7G announced support from a number of B.C. and Alberta Chiefs and First Nations representatives. The announcement got limited media coverage – much like a 2011 media release they put through commercial newswire services. Just before our press time, the Financial Post ran an opinion column advocating for the idea – the first real exposure for the plan.
Kemerer explains G7G has been “media shy to a fault” as they conducted their consultations with First Nations in private.
The Times Review contacted Tom Jackson for an interview, but his press secretary said he’d be busy into the new year.
I asked Kemerer about Jackson’s involvement. “All his buddies are in the oil patch,” he tells me. Enbridge Pipelines Inc. has been a major sponsor of his Huron Carole concert series that raises funds for Canadian food banks.
In the limited media coverage to this point, Tom Jackson’s common name (I believe) has meant nobody’s made the connection between the Officer of the Order of Canada and the company – it’s simply been listed beside the other three directors.
At this point, G7G is looking for money to complete feasibility studies. They’re floating a few options, in the millions- to tens-of-millions range for a stake.
Will their plan be a success?
Kemerer explains G7G is in the midst of a modern nation-building Great Game, and the variables are many.
They’ve rallied a range of support.
Alaska Governor Sean Parnell noted the longstanding vision for a railway, including a 2005 study jointly funded by Alaska and the Yukon, and a more recent $1.1 million University of Alaska study on the subject. “The potential economic benefits of a rail link for both Alaska and Canada have been a vision as far back as the Harriman Expedition in the mid-1800s,” Parnell wrote in a letter to G7G that the Times Review confirmed with the Governor’s office. “Tremendous mineral wealth also exists along and near the rail corridor. Interest by my administration and the legislature for potential economic benefits of a rail link remains strong, and this work will be complimentary to the G7G feasibility efforts.”
G7G also has opponents and rivals. The Enbridge Northern Gateway proposal and the Kinder Morgan pipeline expansion being the most notable.
“It’s difficult to deal with the powers that be right now,” Kemerer explains. The federal government and the oil patch were betting on the pipelines, but he believes that’s changing. “This is an Ottawa, Alberta issue.”
Kemerer believes both efforts are doomed to fail as the proponents fail to gain “social licence” for pipelines through B.C.
“Someday we’ll have our day; I don’t know if it’s now or when Harper abandons Enbridge,” he said.
If they fail to make it to the Pacific, the oils sands would languish under low prices in the U.S. market – a national tragedy.
“I call it a risk to the Canadian economy,” Kemerer adds. Like pioneers 125 years ago, he views the G7G railway as an absolutely vital nation-building exercise. “This is why we have to get to the west coast.”