Canadian National Railway is offering to take Alberta industry back to the future. Trains of 100 or more tank cars could deliver oil sands output to Gulf of Mexico refineries in eight to 10 days, CN executive Randy Meyer promises.

The new service offer, called “the pipeline on rails,” recalls the first drilling rush after the 1947 Leduc discovery inaugurated the modern Canadian petroleum industry. Until the first long-distance pipeline was built three years later, trains carried the black gold from Edmonton to the big markets.

“We’re talking millions, not billions,” Meyer said in describing costs of restoring bulk oil delivery service to the rail network at an Insight industry conference in Calgary. Freight rates covering track and rolling stock expenses are forecast to be competitive with tolls estimated at $8 a barrel for shipments on new pipelines from Fort McMurray to the Gulf Coast.

The offer is a scaled-down version of a multibillion-dollar plan for an entirely new oil sands railway that was studied at former premier Ralph Klein’s request but abandoned as too ambitious. The jumbo scheme called for creation of a hybrid government and industry company, called Northeast Alberta Transportation Corp. or NEATCor for short, to take over and expand all rail and road service in the oil sands region.

CN is offering deliveries via the old railway branch line between Edmonton and Fort McMurray, which it recently bought from short-haul specialists Athabasca Northern Railway and Lakeland & Waterways Railway. The scheme grows out of new work on aged track that for decades carried a combination freight and passenger train.

The aging rails warped because they were laid across swampy northern bush, forcing trains to hold their speed down to a crawl. The pace stayed slow while the short-haul firms owned the line because they could not afford to bring the track up to modern standards.

About $135 million in improvements are strengthening the line and its safety systems enough for heavy trains to average 40 kilometers an hour between Fort McMurray and Edmonton, CN executive Fiona Murray says. “The infrastructure’s there and we could start very quickly,” she reports. The track could eventually be extended into the bitumen mining district north of Fort McMurray if industry demand develops for the pipeline on rails, she adds.

“This is a great idea,” Connacher Oil and Gas Ltd. vice-president Cameron Todd said in urging CN to press ahead with the new service offer. “They’re a breath of fresh air. These (oil sands plants and railways) are very complementary technologies.”