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Oil Boom Putting Pressure on Both Pipelines and Rails Oil Boom Putting Pressure on Both Pipelines and Rails

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Oil Boom Putting Pressure on Both Pipelines and Rails

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Scorched oil tankers at a train derailment site in Lac-Megantic, Quebec, in July.(STEEVE DUGUAY/AFP/Getty Images)

As North American oil production continues to outpace pipeline capacity, railways are increasingly filling the gap. But a series of explosive Canadian derailments have raised questions about rail as a transportation alternative, and some are saying that oil gone off-the-tracks underscores the need for pipeline expansion.

“You saw the train accident in Canada,” said House Energy and Commerce Committee Chairman Fred Upton, R-Mich., when asked about the proposed Keystone XL pipeline carrying heavy crude from Canada to U.S. refineries. He called pipelines “cheaper and safer” than trains.

 

Even Keystone opponents are wary of the burgeoning oil-by-rail industry. “Oil companies have started facing a pipeline bottleneck,” said Keith Stewart, climate and energy campaign coordinator for Greenpeace Canada. As a result, railcars are carrying more and more oil, a method that has “been unsafe since the 1990s.… [But the cars] continue to be used.”

For Stewart, rail problems and pipeline-safety issues are a signal that it’s time for heavier investment in renewable energy because petroleum transport will always present environmental risks.

Others see it differently. North American oil production continues to climb, say industry groups and pipeline advocates, and current consumer demand dictates that it will reach the market one way or another. In the U.S., oil-by-rail shipments have doubled in two years, from 700,000 barrels a day to 1.4 million. Western Canada, shipping minimal amounts of crude by rail at the start of last year, now exports 150,000 barrels per day on trains. That number could jump to 360,000 barrels by the end of 2014, according to industry data and analysis company IHS.

 

TransCanada, the prospective builder of the Keystone XL pipeline, estimates North American trains could be moving 2 million barrels a day before 2014 is out.

That expansion has allowed the industry to bring North American oil to market while pipelines catch up. But not everyone sees that as a good thing. In July, a freight train carrying crude oil derailed in Lac-Mégantic, Quebec, killing 42 in the subsequent explosion. Canada tightened safety standards related to the specifics of that disaster, but a Saturday derailment and explosion in Alberta has renewed worries.

Just as the Quebec derailment has become a flash point for the dangers of rail transport, critics often cite the 2010 Enbridge pipeline spill into Michigan’s Kalamazoo River as an example of pipeline dangers. More than 1 million gallons of crude flowed into the river, thanks to a 17-hour delay between the initial alarms and the company’s reaction. Dredging cleanups have continued as recently as this year, as the diluted bitumen shipped in the pipeline sunk to the river bottom.

Still, said Upton, that spill—the effects of which made it downstream to his district—should not be a reason to stop pipeline expansion. He noted that the pipeline-safety bill he sponsored in 2011, and that was signed into law in early 2012, requires faster spill reporting and greater accountability for pipeline operators. “Isn’t it better to put it in a pipeline than it is in a ship or a truck or rail?” he asked.

 

This article appears in the October 23, 2013 edition of NJ Daily as Pipeline vs. Rail a Growing Oil-Transport Issue.

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