Before the Alberta government spends taxpayers’ money on a multi-billion-dollar railway from Edmonton to the oilsands projects north of Fort McMurray, here’s a suggestion.

Put the government- subsidized choo-choo on hold. Invest first in a new electronic database to prevent any more oilsands mega-projects from being financially derailed.

In a talk to the recent Canadian Energy Research Institute (CERI) oil conference in Kananaskis, Brant Sangster, Petro-Canada’s senior vice-president of oilsands, called for the creation of a new database of detailed construction costs incurred in building oilsands projects.

The joint venture would include the Alberta government, energy producers and key contractors, Sangster said. Given the fierce competition in the oilpatch, the shared database would also have to be anonymous and be managed by the province.

It’s an idea that makes more sense than the Little Government Engine that Could, especially considering the enormous cost overruns on several new oilsands projects.

Syncrude Canada revealed last month that its current Stage 3 expansion – estimated to cost $4.1 billion when first announced in July 2001 – will take another year to complete and cost a further $2.1 billion.

Shell Canada ran up a pricetag of $5.7 billion in finishing its massive Athabasca oilsands project last year – 50 per cent more than originally budgeted.

And Suncor Energy’s Project Millennium expansion pulled into the station about 70-per-cent over budget at $3.4 billion.

Unless Alberta Energy and the industry want more cost overruns to put the last spike in new projects, it makes sense to compile some meaningful cost figures and construction experiences into a shared, central repository.

The database would enable oilsands developers to compare notes, learn from previous mistakes and collaborate on ways to keep costs for projects within budget.

And it’s not like databases that help companies produce oil and gas in the most cost-efficient way are a revolutionary idea in the oilpatch. The Alberta Energy and Utilities Board, for example, maintains sophisticated and secure databases on well data, reservoirs, reserves and other information so companies don’t have to keep going over the same ground – literally.

Sangster also told the CERI conference that when companies make their final go-ahead decisions on oilsands projects, only between 10 and 20 per cent of the detailed engineering work has been completed.

That’s inexcusable. It would be like you or me starting to build a house from a blueprint that has detailed drawings only for the living room.

Project planning like that doesn’t make for a sound foundation, especially for an industry with more than $60 billion worth of new projects on the drawing board.

ENBRIDGE HOT TO TROT

Just when TransCanada Corp. thought it was the only horse left in the race to build the proposed $20-billion US Alaska Highway pipeline, up trots Enbridge Inc.

Pat Daniel, Enbridge’s president and CEO, says his company has the economic discipline and the northern experience to build and operate at least the Alaskan section of a pipeline to carry gas from the state’s North Slope to the U.S. Midwest.

But TransCanada Corp., Canada’s larger pipeline giant, is ready to gallop ahead and build the 2,800-kilometre line from northern Alaska to the Yukon border and potentially beyond.

Last month, MidAmerican Energy Holding Co., an American firm controlled by billionaire Warren Buffet’s Berkshire Hathaway Inc. conglomerate, dropped its plan to build the Alaska portion of the pipeline for an estimated $6.3 billion.

At this point, I’d say TransCanada has the inside track. The company has owned rights-of-way certificates for a potential Alaska Highway pipeline for more than 20 years through its wholly owned subsidiaries, Alaskan Northwest Natural Gas Transportation Co. and Foothills Pipe Lines Ltd.

TransCanada and Enbridge could team up to build the pipeline.

But for that to happen, Enbridge would have to agree to TransCanada’s route – a path Enbridge’s Daniel says he’s not tied to.

There are also still a couple of dark horses in this high-stakes race.

The Alaska Gasline Port Authority, a consortium of local governments in the state, proposes a pipeline that would run from the North Slope to the port of Valdez, Alaska, where gas would be liquefied and shipped via LNG tanker to potential buyers in the Far East or on the U.S. West Coast. Another line would carry gas through Canada to the lower 48 states.

Also, North Slope gas producers ExxonMobil Corp., BP plc and ConocoPhillips Co. would prefer to build their own Alaska pipeline to the U.S. Midwest. But the producers’ group is still saying that the pipeline’s current economics are unworkable.

So don’t place your bets yet. Race day is still at least a decade away.

ENERGY TRUSTS EXPAND

A couple of energy trusts are joining the big league in oil and gas production.

Provident Energy Trust will grow by more than 40 per cent by issuing trust units to buy Olympia Energy Inc. for $216.6 million and Virococha Energy Inc. for $205.9 million, in independent acquisitions. Shareholders of both Olympia and Virococha will also get a share in two separate new exploration firms to be spun out of the deals.

Provident says the acquisitions, expected to close in June, will boost production by 34,000 barrels of oil equivalent a day, or six per cent per trust unit.

Cash flow and proved reserves would rise by 10 per cent per unit.

Meanwhile, Petrofund Energy Trust will expand its production by more than a third to 37,133 barrels of oil equivalent a day, through a $450-million purchase of Ultima Energy Trust.

Unitholders will vote May 26 on the deal, which includes Petrofund units plus a one-time, $10-million cash distribution for Ultima unitholders.

The deal will increase Petrofund’s share to about 20 per cent in the Weyburn oilfield in southeast Saskatchewan, where carbon dioxide gas pipelined in from North Dakota is being pumped underground to successfully increase oil production in the aging field.

Petrofund’s vote of confidence in CO2-enhanced oil recovery technology could spur similar projects, which would not only help boost Alberta’s oil revenues but also keep greenhouse gas out of the atmosphere.