A group of Haines and Whitehorse residents are confident building a railroad from Carmacks, Y.T., to Haines is possible – so much so that they recently created a company and registered for a business license to do just that.
Haines residents Dave Berry, Bill Kurz and Dave Nanney along with Whitehorse city councilman Kirk Cameron registered with the state April 1 as Haines & Yukon Railway, LLC. They also obtained a business license to build the railroad, which is estimated to cost at least several billion dollars.
Kurz said in an interview Tuesday the company will be looking for investors interested in getting the railroad built. He acknowledged that the railroad “isn’t something that will get built tomorrow” and many people would have to get together to make it happen, but said it’s worth pursuing.
“You’ll never climb any mountain until you take the first step,” Kurz said. “It’ll either happen or it won’t, but it’s worth a try.”
Kurz said the four men waited to form the company until after the Canadian consulting firm PROLOG Canada released its draft report of the Haines Rail Study this week. The study outlined four options ranging in cost from $3.6 billion to upwards of $9 billion to run a railroad from Haines to various cities in Alaska and the Yukon Territory.
The study, paid for by the state but managed by the Haines Borough, cost $100,000.
A handful of borough officials and members of the private pro-industry Haines Port Development Council turned out Monday to hear a presentation by PROLOG consultants Kells Bolland and Claire Derome. Derome has worked for several mining firms, including the Western Copper Corporation and the Yukon Producers Group, which promotes mining in the territory.
The study examined four possibilities: a Haines to Carmacks railway ($3.6 billion), a Haines to Delta Junction railway ($6.7 billion), and a Haines to Carmacks railway built in tandem with a railway from the Alberta oil sands to Delta Junction ($3.6 billion).
It also looked at a potential railway from Haines to the undeveloped Crest Iron Ore deposit in the northern Yukon Territory, which had no firm estimate but PROLOG ballparked at about $9 billion for the railroad plus more for the port that would need to be built to accommodate the project’s immense volume.
The stand-alone $3.6 billion Haines to Carmacks railway is “not commercially viable,” Bolland said. He also said that the $6.7 billion Haines to Delta Junction government investment scenario “really doesn’t work under any circumstances.”
The scenarios were analyzed using a 30-year life cycle to see if companies or government could make their money back in that timeframe.
The other two options hinged on various speculative ventures coming together, such as if a $15 billion railway from Fort McMurray, Alberta, to Delta Junction is ever built (a $2 million “pre-feasibility” study funded by the Canadian G7G Railway Corporation is in the works). The other major question mark is if the Crest Iron Ore deposit – the largest ore deposit in North America currently leased by Chevron – is developed.
Mayor Stephanie Scott, who attended the presentation, said she doesn’t think any railroad to Haines will ever pencil out with public involvement. “That is probably the only way this is ever going to happen, if it’s not public money. If it’s driven by economics, and it’s not public money,” Scott said.
“We’re talking about a project that would probably not be completed in the lifetime of anybody in that room,” she added.
Assembly member Dave Berry, who is also a member of the Haines Port Development Council, said public money shouldn’t be funneled into the project.
Kurz said while the Haines and Yukon Railway will be working with the Haines and Yukon governments on the project, the company “is not looking for grants or handouts.”
“I’m a firm believer in private enterprise,” he said.
Assembly member Debra Schnabel said she wouldn’t promote putting the borough’s energy or money into such a far-off project. But she said she was interested in the many hypothetical numbers and situations used in the study.
“I sat in the room and thought, ‘This is really interesting, how these guys approach the question of ‘What if?’ What if the mineral deposits prove to be developable? Can somebody put the money in to make it happen? Can the owners of the mineral deposit finance the development? Are there markets for it?”
Schnabel said she also thinks the Alberta railroad isn’t really on the table and called it “a thinly-veiled attempt at political pressure to make the Canadian oil sands flow south.”
“There are two scenarios that might be a possibility for having an economic reward for Haines and the state: one is too far in the future (the Crest Iron Ore project) and the other is political game-playing,” she said.
PROLOG Canada also performed the $5 million Alaska Canada Rail Link Project feasibility study in the mid-2000s.