First Nations partnership is important in a Churchill/Port Nelson transportation corridor. Participation would lead to benefits for community members in the form of community funding, good paying jobs, training, and economically sustainable communities. Their knowledge of the land, flora and fauna are key to managing a successful transportation system..Port of Churchill — The shorter shipping season for blue water generally means early maturing crops like peas and lentils can be shipped out before the ice sets in. With an upgraded Port of Churchill, more volumes of container goods could be transported. Fertilizer could be shipped to international markets from Saskatchewan. I would advocate for oil to be shipped by rail to Port Nelson. The rail bed is already laid. This would provide additional volumes over 500-km of the 800-km of track that's on solid ground and support the viability of maintaining the northern section to Churchill..Port Nelson — Build a tank farm at Port Nelson, run a filling line offshore to a loading terminal for larger tankers to load. This is how oil is unloaded at the Irving Refinery in New Brunswick. The capital requirement to make this happen is comparatively cheaper than trying to upgrade and maintain the last 300-km of rail line to Churchill. The silt issues of the early 1900s on the Nelson River mentioned in yesterday's article are less of a factor with the number of dams on the river..Manitoba Hydro currently has a surplus of power with five dams on the Nelson River. Hydro is clean energy with low emissions. Ship clean hydro power from northern Manitoba to Ft. McMurray in Alberta. Sound far? Not really. Alberta has built similar length direct current lines north and south in Alberta. Alberta is connected to BC’s grid. It’s a lot easier running power poles over empty flat ground than up and down mountainous valleys from BC..Shipping costs — Rail costs to ship oil from Alberta are about $10/barrel, (bbl), while a pipeline would be about $6/bbl while the marine shipping cost is approximately $4/bbl depending on the destination. Rail to the US Gulf Coast is $26/bbl by comparison. The pipeline tolls for the US Gulf Coast are about $18/bbl while the TransMountain pipeline now under construction could be $15/bbl. The distance is much shorter than to the Gulf Coast, so cycle times are more than twice as fast. That means less rail cars and engines are needed..Further, the rail loading infrastructure exists in Alberta and Saskatchewan to feed a 200,000 bbl/d operation, which is roughly three unit trains of 100 cars each. Further, the federal government can’t restrict the shipping of oil by rail across provincial borders as easily as they can veto a pipeline that crosses provincial borders..Back to energy — While we have some political leaders decrying why energy companies don’t invest more in supply, the fact is meddlesome political leaders have strangled pipeline development. (Just look at the TransMountain debacle!) As pipelines are close to maximum capacity, even if the Trans Mountain pipeline is ever finished, that will quickly be filled by the Montney, Duvernay and oil sands de-bottlenecking..While people quickly forget, we've seen oil prices below zero twice in the past four years because there was a lack of egress from Western Canada by pipeline and rail. When oil goes to $0 per barrel the finances of the Alberta government fall into the abyss as royalties collapse along with corporate and personal income..Neither the UCP nor the NDP want that. Funding social programs, health, education, justice and infrastructure are the primary concerns of government. Wouldn’t a government prefer a solution that reduces unemployment, creates jobs, increases tax revenue, reduces the risk of oil price volatility, diversifies transportation capacity, increases utilization of infrastructure such as dams and roads, and means they won’t have to keep writing $100 million cheques just to maintain an unsustainable rail line?.This is a win-win-win solution for First Nations, the Canadian economy, taxpayers, and government..Jeff Callaway is the president and CEO of High Ground Medica, executive VP and CFO of Blacksteel Energy, and chairman of the Western Standard. Second in a series of two.
First Nations partnership is important in a Churchill/Port Nelson transportation corridor. Participation would lead to benefits for community members in the form of community funding, good paying jobs, training, and economically sustainable communities. Their knowledge of the land, flora and fauna are key to managing a successful transportation system..Port of Churchill — The shorter shipping season for blue water generally means early maturing crops like peas and lentils can be shipped out before the ice sets in. With an upgraded Port of Churchill, more volumes of container goods could be transported. Fertilizer could be shipped to international markets from Saskatchewan. I would advocate for oil to be shipped by rail to Port Nelson. The rail bed is already laid. This would provide additional volumes over 500-km of the 800-km of track that's on solid ground and support the viability of maintaining the northern section to Churchill..Port Nelson — Build a tank farm at Port Nelson, run a filling line offshore to a loading terminal for larger tankers to load. This is how oil is unloaded at the Irving Refinery in New Brunswick. The capital requirement to make this happen is comparatively cheaper than trying to upgrade and maintain the last 300-km of rail line to Churchill. The silt issues of the early 1900s on the Nelson River mentioned in yesterday's article are less of a factor with the number of dams on the river..Manitoba Hydro currently has a surplus of power with five dams on the Nelson River. Hydro is clean energy with low emissions. Ship clean hydro power from northern Manitoba to Ft. McMurray in Alberta. Sound far? Not really. Alberta has built similar length direct current lines north and south in Alberta. Alberta is connected to BC’s grid. It’s a lot easier running power poles over empty flat ground than up and down mountainous valleys from BC..Shipping costs — Rail costs to ship oil from Alberta are about $10/barrel, (bbl), while a pipeline would be about $6/bbl while the marine shipping cost is approximately $4/bbl depending on the destination. Rail to the US Gulf Coast is $26/bbl by comparison. The pipeline tolls for the US Gulf Coast are about $18/bbl while the TransMountain pipeline now under construction could be $15/bbl. The distance is much shorter than to the Gulf Coast, so cycle times are more than twice as fast. That means less rail cars and engines are needed..Further, the rail loading infrastructure exists in Alberta and Saskatchewan to feed a 200,000 bbl/d operation, which is roughly three unit trains of 100 cars each. Further, the federal government can’t restrict the shipping of oil by rail across provincial borders as easily as they can veto a pipeline that crosses provincial borders..Back to energy — While we have some political leaders decrying why energy companies don’t invest more in supply, the fact is meddlesome political leaders have strangled pipeline development. (Just look at the TransMountain debacle!) As pipelines are close to maximum capacity, even if the Trans Mountain pipeline is ever finished, that will quickly be filled by the Montney, Duvernay and oil sands de-bottlenecking..While people quickly forget, we've seen oil prices below zero twice in the past four years because there was a lack of egress from Western Canada by pipeline and rail. When oil goes to $0 per barrel the finances of the Alberta government fall into the abyss as royalties collapse along with corporate and personal income..Neither the UCP nor the NDP want that. Funding social programs, health, education, justice and infrastructure are the primary concerns of government. Wouldn’t a government prefer a solution that reduces unemployment, creates jobs, increases tax revenue, reduces the risk of oil price volatility, diversifies transportation capacity, increases utilization of infrastructure such as dams and roads, and means they won’t have to keep writing $100 million cheques just to maintain an unsustainable rail line?.This is a win-win-win solution for First Nations, the Canadian economy, taxpayers, and government..Jeff Callaway is the president and CEO of High Ground Medica, executive VP and CFO of Blacksteel Energy, and chairman of the Western Standard. Second in a series of two.
