Oil Boom Putting Pressure on Both Pipelines and Rails

Scorched oil tankers remain on July 10, 2013 at the train derailment site in Lac-Megantic, Quebec. Edward Bukhardt, CEO of Montreal, Maine and Atlantic Railways Inc.,(MMA) told reporters Wednesday that the train was left running while the engineer spent the night sleeping in a hotel in Nantes, adding that the engineer was following standard 'industry practice.' The train carrying crude oil from North Dakota derailed in the town of Lac-Megantic overnight Friday, causing a massive fire and explosions that killedat least 15 people, with another 45 still missing. 
National Journal
Alex Brown
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Alex Brown
Oct. 22, 2013, 6:01 p.m.

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.

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