U.S. President Donald Trump is set to approve a $22-billion freight railway project that will run between Alberta and Alaska to transport a variety of commodities such as oil, ore, and potash, as well as container goods. The 2,570-km line will run from Fort McMurray in Alberta to the Delta Junction in Alaska, CBC reported, where it will connect to the existing railway network and carry the goods to ports around Anchorage.
"The Government of Alberta is glad to see the approval of the A2A rail project in the United States," a spokeswoman for the Alberta Premier, Jason Kenney, said in a statement. "We support the development of trade corridors that can unlock new markets for Alberta's products."
Canada’s oil province has been badly hit by the pandemic because it was already struggling with low oil prices and a shortage of outlets for the oil it produced. Any new outlet for this oil, whether by pipeline or by train, is good news for Alberta’s embattled energy industry.
Meanwhile, the Alberta natural resources industry is shedding jobs at an alarming rate because of the pandemic. Data for the second quarter recently showed that job losses in the province’s energy sector hit an all-time high at 43,000. The pandemic-caused crisis also spurred a wave of consolidation in some parts of the oil sands.
Earlier this year, the provincial government released a blueprint for Alberta’s economic recovery that featured investments in infrastructure projects and tax cuts to stimulate business activity.
The new railway line would certainly alleviate some of the pressure on oil producers as it would likely be the most exported commodity, even amid depressed demand: heavy crude, the sort that Albertan producers extract, has been in short supply since the U.S. almost cut off Venezuela’s access to international oil markets. Yet it will not be the only one, according to one Alberta economist. What’s more, the line could also be used for imports into Alberta, Kent Fellows from the University of Calgary’s School of Public Policy told CBC.
By Michael Kern for Oilprice.com
More Top Reads From Oilprice.com:
- Cash-Strapped Iraq To Finally Roll Out Refinery Megaproject
- BP Bombshell: India’s Oil Demand May Peak In 2025
- Gold Stocks Are Bracing For A Seasonal Plunge