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Trump-backed Canadian railway to Alaska could free landlocked oil, faces high hurdles

October 01/2020

MOSCOW (MRC) -- A private-sector proposal, endorsed by U.S. president Donald Trump, to build a railway from Canadas oil sands to ports in Alaska would free landlocked crude but faces numerous steep challenges, said Hydrocarbonprocesing.

Trump wrote on Twitter over the weekend that he would issue a permit for the Alaska-Alberta Railway Development Corporation (A2A Rail) project to move Alberta crude 1,600 miles (2,570 km) to the Alaskan coast, as well as freight in the other direction. I will be issuing a Presidential Permit for the A2A Cross-Border rail, Trump said. He said his decision was based on the recommendation of fellow Republicans Dan Sullivan, a U.S. senator, and Don Young, a U.S. representative. Projects that cross the U.S. border require presidential permits.

The USD17 billion project, which backers hope will be in service by the end of the decade, was first proposed in 2015 by Canadian infrastructure financier Sean McCoshen. It could carry up to 2 MM barrels of oil per day, along with potash, sulfur and grain that often back up at Canadas Vancouver port, said Mead Treadwell, A2As vice-chair, Alaska. The diversity of commodities helps reduce the risk, he said.

The case for A2A has involved often-congested pipelines that move Alberta crude to U.S refineries. However, new pipelines are now under construction. Options to move crude from Canada, the world's fourth-largest producer, are useful, but A2A is "a very challenged project," said Dennis McConaghy, a former pipeline executive at TransCanada Corp, now known as TC Energy Corp.

Transportation costs to reach Asian or U.S. Gulf Coast refiners would be substantially higher than those involving pipelines, he added.This project makes sense if its absolutely the last resort, McConaghy said. A2A would require numerous regulatory clearances in the United States and Canada that would likely take years. Discussions with shippers have not yet happened in depth, Treadwell said. He added that A2A would offer indigenous groups in the area a chance to invest.

Shipping oil by rail has caused several high-profile accidents in both Canada and the United States in recent years. At a time when California is banning gas-powered cars and China is pledging to transition off fossil fuels, its hard to imagine a bigger waste of money than building a rail line to move oil trains over the melting permafrost, said Keith Stewart, senior energy strategist at Greenpeace Canada.

The White House did not respond to a request for comment on how soon Trump would issue the permit. Such a rail link has been a dream for many generations, said Alaska Governor Mike Dunleavy in a statement. Funded privately, it would reduce Alaskas costs of goods and services, he said.

Alberta supports A2A as it would unlock new markets for the provinces exports, said Kavi Bal, senior press secretary for its energy ministry.

As MRC informed earlier, Russia's output of products from polymers grew in August 2020 by 4.1% year on year. However, this figure increased by 1.9% year on year in the first eight months of 2020. According to the Russian Federal State Statistics Service, August production of unreinforced and non-combined films rose to 126,300 tonnes from 118,200 tonnes a month earlier. Output of films products grew in January-August 2020 by 8.3% year on year to 863,200 tonnes. Last month's production of non-porous polymer boards, sheets and films exceeded 38,700 tonnes versus 36,400 tonnes in July. Thus, overall output of these products reached 271,900 tonnes over the stated period, up by 3.5% year on year.
Author:Anna Larionova
Tags:petroleum products, crude oil, neftegaz, petrochemistry.
Category:General News
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