A federal government briefing note obtained by Greenpeace and released to local and national media shows a high level of interest in shipping oil to Asia through port of Prince Rupert, with the oil arriving by rail.
The note was prepared for Natural Resources Canada deputy minister Michael Keenan by Lisanne Baznet of the Petroleum Resources Branch in preparation for a March 1 2013 meeting with CN to discuss the idea.
"According to reports, Nexen is working with the Canadian National Railway Company and the Prince Rupert Port Authority to select lands in Prince Rupert that could be used for the export of oil," wrote Bazinet.
"Prince Rupert's Ridley Island is already serviced by CN tracks ... the concept would require the construction of an oil trans-loading facility in Prince Rupert, which does not currently exist."
While CN has stated the meeting in question did not address any particular project, Prince Rupert Port Authority manager of corporate communications Michael Gurney confirmed discussion around shipping oil from Prince Rupert have taken place with the energy giant.
"Nexen has been, and continues to be, in conversation with the Prince Rupert Port Authority for a possible oil-by-rail solution. But at this point, that is strictly conversation," he said.
"It is one of many conversations the port authority is having with a number of businesses looking to export Canadian resources to Asian markets."
The briefing note warns that, in addition to building terminals, the means of shipping oil to Prince Rupert is a challenge facing any such project.
"The railway companies do now own and are not investing in rail tank cars. The railway companies do not own and are not investing in rail tank cars, Rail tank cars cost between $100,000 and $120,000 each, and are bought and owned for the most part by Procor and United Tank Car, which then leases them to the shippers ... according to officials of Transport Canada, there is a waiting time of two and one half years to secure new rail cars," wrote Bazinet, noting it would be difficult but possible to match the capacity of the Enbridge Northern Gateway pipeline.
"To transport 550,000 barrels of oil per day ... would require operating 10 trains of 100 cars every day - about one train coming and going every hour. The maximum amount of crude oil that could be transported by rail for export will also depend on the railway's requirement to move other products to export, as well as the capacity of any proposed oil handling facilities at the port."