RAILWAY TO THE ARCTIC: A STUDY OF THE OPERATIONAL AND ECONOMIC FEASIBILITY OF A RAILWAY TO MOVE ARCTIC SLOPE OIL TO MARKET

This is a summary report of a much more extensive study conducted by the Canadian Institute of Guided Ground Transport between May and October 1971, with co-operation and assistance from Carnegie-Mellon University, Canadian National Railways, Canadian National Telecommunications and PROCOR Limited, Rail Car Division. The study grew out of an earlier study by Carnegie-Mellon. It is concluded that a railway as proposed is technically and operationally feasible and appears financially attractive. The most appealing of three routes studied starts at Prudhoe Bay, proceeds along the Arctic slope to the Mackenzie Delta, and then Southeast along the Mackenzie River valley ending near the Trout River, a distance of some 1200 miles. From here the oil would proceed by pipeline, since permafrost is no longer a problem. The railway would require some 360 six-axle locomotive units and 11,000 tank cars of 94 tons capacity. Twenty trains per day, of 168 cars, pulled by five locomotive units, including two "slave" units, seems an optimum configuration to move the necessary 2 million barrels of oil. The railroad would be double track with advanced communications. The capital cost would be about 2.4 billion dollars, annual operating cost 193 million dollars. A tariff of about 0.67 cents per barrel, producing $489 million annual revenue, would return in excess of 10 percent on equity, with a 7 percent cost of debt (75-25 debt-equity ratio) using discounted cash flow calculations. Using 40 cents per barrel for Trout River to Chicago (in general agreement with Interprovincial Pipeline figures) the cost of transporting crude oil from Prudhoe Bay to Chicago using the rail and pipeline system is conservatively estimated at $1.07 per barrel.

  • Corporate Authors:

    Canadian Institute of Guided Ground Transport

    Queen's University
    Kingston, Ontario K7L 3N6,   Canada 
  • Authors:
    • LAW, C E
    • CORNEIL, E R
    • Lake, R W
    • Helmers, H O
    • MacDonald, J A
    • Baldwin, J R
    • RICE, R A
    • Charles, J L
    • Olley, R E
    • Dunford, FEF
    • Mackay, NAM
    • ROSZNER, E S
    • Kerr, C N
  • Publication Date: 1972-7

Subject/Index Terms

Filing Info

  • Accession Number: 00041612
  • Record Type: Publication
  • Source Agency: Canadian Institute of Guided Ground Transport
  • Report/Paper Numbers: CIGGT-72-1 Summry Rpt
  • Files: TRIS
  • Created Date: Jun 15 1973 12:00AM