FAIRBANKS — The Alaska Railroad Corp. has become the first railroad in the nation with permission to transport liquefied natural gas by rail.

The state-owned corporation applied to the Federal Railroad Administration for approval to begin carrying liquefied natural gas containers last year and received official approval last week.

“It’s a wonderful opportunity to be provided to be able to move LNG,” Chief Operating Officer Doug Engebretson said. “Nowhere else in the United States is there another carrier that can move LNG by rail. You can move it by truck, but not by rail.”

The company applied to carry LNG containers after energy companies began asking about the possibility to use the railroad as an alternative to trucking to get natural gas to the Interior.

The state is currently pushing for a project to bring gas to Fairbanks, and rail and trucking are options being explored by the five finalists for the project.

Engebretson said the Alaska Railroad is excited about any potential to carry LNG, but he said what form that will be will ultimately be decided by the companies and the utilities working on the project.

“It could be that somebody wants to carry it by ocean to the Port of Anchorage and put it on the rail to the Interior,” he said. “There’s so many unknowns about who the final provider will be, the volumes, and how the infrastructure and distribution process will work.”

The approval is relatively limited and requires rigorous safety standards and regular reporting to the FRA.

The capacity is limited under the agreement to eight containers per direction per week, which is a lower capacity than many estimates of the trucks per day that the project would require. There are estimates ranging from 18 to 30 deliveries per day.

Engebretson said he wasn’t too worried about the limit. He said the primary focus is safety and that the agreement can be updated as needed.

“Hey, it’s OK. It’s an opportunity,” Engebretson said. “The FRA from the very beginning was very positive with their attitude to LNG. We were told that they’re not here to say ‘No.’”

Liquefied natural gas is a condensed and pressurized form of natural gas that makes transportation of the fuel easier. LNG in its liquid form isn’t flammable, but in a leak it can vaporize and become flammable if it mixes with air.

The federal approval was welcome to the Alaska Industrial Development and Export Authority, spokesman Karsten Rodvik said. AIDEA is the lead agency on the Interior Energy Project and is exploring a source for the natural gas for the Interior. 

“The news that the Alaska Railroad received is a step in the right direction for the Interior Energy Project,” he said. “We appreciate everything the railroad is doing and will continue to work with them.”

Contact staff writer Matt Buxton at 459-7544. Follow him on Twitter:

@FDNMpolitics.