This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 02 OTTAWA 000714 
 
SIPDIS 
 
SENSITIVE 
 
FOR EB/TRA AND WHA/CAN 
 
E.O. 12958: N/A 
TAGS: ELTN ECIN CA
SUBJECT: ALASKA GOVERNOR MURKOWSKI AND YUKON PREMIER FENTIE 
TALK UP "RAILS TO RESOURCES" IN OTTAWA, BUT QUESTIONS REMAIN 
 
REF: OTTAWA 603 
 
SENSITIVE BUT UNCLASSIFIED--PLEASE PROTECT ACCORDINGLY. 
 
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SUMMARY: 
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¶1.  (SBU) Alaska State Governor Frank Murkowski and Yukon 
Territory Premier Dennis Fentie held two days of meetings in 
Ottawa in late February to promote a proposed rail line to 
link Alaska and Canada.  Murkowski and Fentie jointly tried 
to sell the project to Government of Canada (GOC) officials, 
including Prime Minister Paul Martin and Minister of 
Transport Jean Lapierre.  Murkowski and Fentie also explained 
the rail proposal, dubbed "Rails to Resources," to Ambassador 
Cellucci and visiting Secretary of Transportation Mineta. 
They argued that economic benefits would accrue to both 
Alaska and the Yukon Territory from expansion of railroad 
infrastructure that could further development of natural gas, 
mineral, and timber exports to the Lower 48.  The GOC appears 
willing to participate in a feasibility study of the rail 
project but is not inclined to participate in a formal 
binational commission.  Post will attempt to precisely gauge 
GOC interest.  End summary. 
 
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RAILS TO RESOURCES: 
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¶2.  (U) The proposal for a link between the Alaskan and 
Canadian rail systems has been under consideration for 
several years.  The Rails to Resources Act, enacted by 
Congress in December of 2000, was sponsored by then-Senator 
Murkowski.  It authorized the establishment of a Joint 
Binational Commission, staffed equally by Americans and 
Canadians, tasked with studying the feasibility of the 
proposed rail project that would link the Alaskan rail system 
with that of the Yukon and continue on through British 
Columbia's railroad and into Washington State.  The project 
would require construction of some 1,200 miles of railroad 
from the end of Alaska's rail terminus near Fairbanks to 
Canadian spurs at either Fort Nelson or Fort St. James. 
 
¶3.  (SBU) The Rails to Resources Bill authorized $6 million 
to fund U.S. participation in the Commission; it was expected 
that Canada would fund an equal amount.  (Note: 
Subsequently, Congress appropriated only $2 million, not $6 
million, for the work of the Commission, but that money has 
since been transferred to the University of Alaska for 
engineering work on the Alaskan portion of the railroad.  End 
note.)  Over the past five years the GOC has been reluctant 
to make a commitment to Rails to Resources.  This lack of 
enthusiasm appears to stem from concerns that the rail 
project would be excessively expensive with doubtful economic 
benefits, as well as uncertainties about the eligibility of 
this type of binational commission for Canadian federal 
funding. 
 
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MAKING THE PITCH IN THE CAPITAL: 
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¶4.  (SBU) The Governor and the Premier knocked on many doors 
in Ottawa on February 23 and 24.  Prime Minister Martin was 
positive about the rail project, but did not offer any firm 
commitments.  Minister of Transport Lapierre indicated that 
the GOC might be willing to participate in a joint 
feasibility study, but he was not enthusiastic about Canada 
joining a binational commission.  As a necessary precursor to 
a joint study, Lapierre said that Alaska and the Yukon 
Territory should develop terms of reference for the study and 
convey these to Washington and Ottawa.  (Comment:  In a later 
bilateral meeting with his counterpart Minister of 
Transportation Norman Mineta, Minister Lapierre again 
indicated a willingness to consider the feasibility study, 
but he was not keen on the notion of a binational commission. 
 End comment.) 
 
¶5.  (SBU) Governor Murkowski and Premier Fentie also had a 
separate meeting with Secretary Mineta, who was in Ottawa to 
address an aviation conference.  The Governor told the 
Secretary that Minister Lapierre was agreeable to joining the 
 
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feasibility study for the railroad.  He mentioned to the 
Secretary the $6 million which Congress had authorized for 
 
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the work of the Joint Binational Commission.  Murkowski and 
Fentie explained the excellent cooperative relations between 
Alaska and the Yukon Territory, and described how the 
resource riches of their adjacent economies could be opened 
up and exploited by construction of the railroad.  The 
railroad's proposed new corridor would pass through untapped 
mineral reserves (gold, silver, lead, zinc), as well as large 
tracts of forest with marketable timber.  Murkowski and 
Fentie also described, as they had at their other meetings in 
Ottawa (reftel), the vast gas resources that the railroad 
would help to open up:  35 trillion cubic feet (tcf) in 
Alaska and as much as 20 tcf in the Yukon.  Murkowski told 
Secretary Mineta that he and the Premier are "waiting for the 
 
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Canadians now" for approval of both the railroad and a gas 
pipeline. 
 
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COMMENT: 
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¶6.  (SBU) The Embassy and the Department have not received 
any recent formal communication from the GOC regarding its 
wishes or intentions concerning the Rails to Resources 
feasibility study.  We understand from Minister Lapierre's 
staff that the GOC is waiting to receive the terms of 
reference for the study from Premier Fentie.  Transport 
Canada indicated this week that it is also interested in 
reviewing cost estimates for the railroad.  (During their 
Ottawa meetings, the Governor's principal railroad advisor 
dropped the figure of $3 million per mile.)  At the present 
time, there appears to be little interest in staffing or 
spending for a Joint Binational Commission.  We will follow 
up with Transport Canada to determine the current Canadian 
position on the feasibility study for the Rails to Resources 
project. 
 
 
 
Visit Canada's Classified Web Site at 
http://www.state.sgov.gov/p/wha/ottawa 
 
CELLUCCI