Proposed oil railway aims to compete with Gateway pipeline

Oil extraction equipment pumps crude out of the ground on a Husky Oil site east of Bruderheim, Alberta on Jan. 11, 2012.



VANCOUVER - A new proposal to get Canada's crude oil to Asian markets may have the key ingredient: Support from the First Nations.

Generating for Seven Generations (G7G) has proposed a 2,400-km railway that would move oilsands product from Fort McMurray, Alta., to the super tanker port in Valdez, Alaska.

CEO Matt Vickers said G7G has support from aboriginal groups in Alaska, Yukon, northern B.C. and northern Alberta who would be affected by the construction and operation of the twinned track.

"We purposefully started the way we did with the First Nations then worked our way back with government as well," Vickers said.

Vickers said the track would cost $12 billion. With three prospective financers already in line, G7G would not require government money, he added.

The track would have the capacity to move five million barrels of oil a day.

The challenge is finding the money to do the $40-million feasibility study.

"The feasibility study will lay out the actual route for the rail to go on," said Vickers. "Most importantly, from the First Nations' side, I met with the leadership and got support for the feasibility study at this time."

The Enbridge proposal is estimated to cost $6.5 billion and would pump crude through a pipeline to a port in Kitimat, B.C.

Environmental groups have argued the terrain off the coast near Kitimat would be too treacherous for super tankers and the chances of an oil spill would be high.

The port in Valdez is also two to four days closer to the Asian markets.

Enbridge does not see this proposal as a threat to its own Gateway pipeline. In an e-mail, company spokesman Todd Nogier said Enbridge's project has received substantial First Nations support.

"Almost 60% of the First Nations communities along the proposed route have taken an equity position in the project and will see benefits flow in the first year of operations - benefits that can be dedicated to the priorities of their communities," said Nogier.

Many First Nations groups in BC have vowed to fight the Gateway pipeline in court if necessary.

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