UCP candidate Callaway urges Alberta buy Port of Churchill to spur oil sales

With Alberta losing out on lucrative offshore energy markets and revenue, United Conservative Party (UCP) leadership candidate Jeff Callaway thinks he's found a solution.

Seeing it as an "infrastructure investment," Callaway said buying the Hudson Bay rail line and the port of Churchill, Man. may be just what Alberta needs to break free of the single-market stranglehold of having only one customer in the United States.

The plan would require a pipeline to be built from Alberta to northern Manitoba so tankers could ship Alberta oil abroad.

Callaway thinks owning an export terminal would provide long-termbenefits for Alberta's economy.

"We'll be increasing domestic prices for the rest of our producers,"Callawaysaid in Edmonton Tuesday. "More tax income, more jobs created there's a ton of spinoff from doing this."

The rail line and port of Churchill have been shut down since the spring, when a portion of the line was washed out.

Callaway says the cost of fixing upthe grain terminals and the rail line would run about $20 million.

"It's a small, small investment to make for prosperity in Western Canada," he said. His plan would also include partnering with industry to build a pipeline to the port, which could run into the billions of dollars.

"I feel we would be showing a lot of leadership as a government of Alberta to actually take on that challenge," said Callaway.

However a recent engineering study done by the port's current owner, Denver-based Omnitrax, estimates the cost between $20 and $60 million.

Omnitrax says negotiations are now going on with various levels of governments, including First Nations, to come up with money for the repairs.

"We have been working diligently on a long-term solution, and hope to arrive at a decision soon,"Peter Touesnard, chief commercial officer ofOmnitraxwrote in astatement to CBC News.

Positioned on the northwest shore of Hudson Bay, the port of Churchill has been limited by a short, four-month shipping season.

Callaway said studies by the University of Manitoba show the season has been getting longer each year.

"We can actually ship through the port of Churchill and across Hudson Bay with new ice-strengthened tankers probably almost year-round now," he added.

Even with an incrementally longer season each year, the relatively short window presents a challenge, said Andrew Leach, an associate professor of business at the University of Alberta.

Leach thinks it might be a better option to look at increasing rail capacity into Churchill, rather than building a brand new roadand an oil pipeline that would be unused for much of the year.

"I wouldn't put the lights right out onHudson Bay and Churchill, but I think it needs a little more examination on the year round, and how to leverage infrastructure best," he said.

• Grain stranded at Churchill's shuttered port to be shipped out this season
• Sask. farmers hope to see Churchill port, rail line revived

Callawayis one of four candidates running to be the leader of the newly formed UCP. The others are JasonKenney, Brian Jean and DougSchweitzer.

During his news conference on thesteps of the Alberta legislatureTuesday, Callawaytook a few verbal swipes at one of his leadership opponents.

Callaway, who has been at odds with formerWildroseleader Brian Jean, said there are questions swirling around how Jean managed hisWildrosecaucus budget.

"I'd be concerned about electing someone who can't even run a $2-million budget,"Callawaysaid.

The UCP leadership vote is set for Oct. 28. The party has yet to announce manyrules surrounding what type of vote it will be, or even how much money candidates must put up to enter the race.

Callawaysaid the lack of clarity doesn't worryhim.

"I'm sure we'll figure it out by the28thof October," he said.