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Originally Posted by calgarygeologist
That being said, can anyone actually shed any light on this rail car issue that Notley has been proposing? I don't know much about it but it seems like a stupid idea to me. Is the Government actually planning on buying rail cars? Will they lease them to CP? How many investment dollars is this expected to cost and are there better alternatives for that money? Maybe most importantly, isn't rail traffic pretty much at a maximum now? Won't the logistics of getting those tankers cars to actually move across the country be extremely difficult to work out?
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It's a terrible idea. While I certainly understand the desire to do something to help move Alberta oil, this "solution" has the potential to create more problems than it solves.
1. Who will be operating and maintaining the new cars and locomotives? I'm assuming they will be leased to CP/CN similar to how the government grain fleet used to be run, but I haven't seen any details of how they're expecting to do that or which railways will be getting what.
2. The Alberta government does not own any rail infrastructure. They might be able to buy the equipment but where will it "live"? Neither CP or CN are swimming in excess capacity right now, and adding more equipment to their respective networks without any provision for more sidings or yards will only create more congestion and potentially delay shipment of other commodities.
3. Even if the physical plants can be leveraged to find additional capacity, it takes more than just railcars to run a train. Where will the additional engineers and conductors come from? The railways will be forced to hire more employees (which isn't necessarily a bad thing) but training them takes time.
4. What happens to all this stuff if a pipeline finally does get built? Now you suddenly have a glut of very expensive rail equipment that you no longer need, with nowhere to put it. You may be forced to sell it for pennies on the dollar.
There is a reason CP and CN haven't been lining up to invest heavily in crude by rail. It is a very unpredictable market with an extremely high cost of entry and a limited lifespan.