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
Add to Briefcase
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.

What We're Following See More »
UNTIL DEC. 9, ANYWAY
Obama Signs Bill to Fund Government
4 hours ago
THE LATEST
REDSKINS IMPLICATIONS
SCOTUS to Hear Case on Offensive Trademarks
4 hours ago
WHY WE CARE

"The Supreme Court is taking up a First Amendment clash over the government’s refusal to register offensive trademarks, a case that could affect the Washington Redskins in their legal fight over the team name. The justices agreed Thursday to hear a dispute involving an Asian-American rock band called the Slants, but they did not act on a separate request to hear the higher-profile Redskins case at the same time." Still, any precedent set by the case could have ramifications for the Washington football team.

Source:
STAFF PICKS
Bannon Still Collecting Royalties from ‘Seinfeld’
5 hours ago
WHY WE CARE

The Hollywood Reporter takes a look at a little-known intersection of politics and entertainment, in which Trump campaign CEO Steve Bannon is still raking in residuals from Seinfeld. Here's the digest version: When Seinfeld was in its infancy, Ted Turner was in the process of acquiring its production company, Castle Rock, but he was under-capitalized. Bannon's fledgling media company put up the remaining funds, and he agreed to "participation rights" instead of a fee. "Seinfeld has reaped more than $3 billion in its post-network afterlife through syndication deals." Meanwhile, Bannon is "still cashing checks from Seinfeld, and observers say he has made nearly 25 times more off the Castle Rock deal than he had anticipated."

Source:
IT’S ALL CLINTON
Reliable Poll Data Coming in RE: Debate #1
6 hours ago
WHY WE CARE
NEXT THURSDAY
Trump Transition Team Meeting with Silicon Valley VIPs
8 hours ago
THE DETAILS

Donald Trump's "transition team will meet next week with representatives of the tech industry, multiple sources confirmed, even as their candidate largely has been largely shunned by Silicon Valley. The meeting, scheduled for next Thursday at the offices of law and lobbying firm BakerHostetler, will include trade groups like the Information Technology Industry Council and the Internet Association that represent major Silicon Valley companies."

Source:
×