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 »
ALL 100 SENATORS
Dem Senator Calls North Korea Briefing “Sobering”
6 hours ago
THE DETAILS
SAYS CLINTON ADMINISTRATION BASICALLY GOT IT RIGHT
Pai Announces Plans to Roll Back Net Neutrality
8 hours ago
THE DETAILS

"Even as he acknowledged the importance of an open internet, FCC Chairman Ajit Pai on Wednesday set his telecom agency on a course to scrap the tough, broad net neutrality protections imposed by the Obama administration. During a major speech in Washington, D.C., Pai outlined the need for a total revision of existing federal rules that seek to prevent companies like AT&T, Charter, Comcast and Verizon from blocking or slowing down web content, including the movie or music offerings from their competitors." Separately, Pai told Reason's Nick Gillespie that the Clinton Administration "basically got it right when it came to digital infrastructure. We were not living in a digital dystopia in the years leading up to 2015."

Source:
WILL ANGER CONSERVATIVES
White House to Continue Paying Obamacare Insurers
8 hours ago
BREAKING
LOFTY GOALS
White House Proposes New Tax Plan
9 hours ago
BREAKING

The White House on Wednesday laid out its plan for tax reform, with Treasury Secretary Steven Mnuchin saying it would be "the biggest tax cut and the largest tax reform in the history of our country." The tax code would be broken down into just three tax brackets, with the highest personal income tax rate cut from 39.6 percent to 35 percent. The plan would also slash the tax rate on corporations and small businesses from 35 percent to 15 percent. "The White House plan is a set of principles with few details, but it’s designed to be the starting point of a major push to urge Congress to pass a comprehensive tax reform package this year," said National Economic Council Director Gary Cohn.

Source:
ORDERED BY PRESIDENT
DHS Launches Office for Victims of Crimes by Immigrants
9 hours ago
THE DETAILS

U.S. Immigration and Customs Enforcement today established the Victims of Immigration Crime Engagement (VOICE), as called for in a presidential executive order from January. The new office's website states that its staff "will be guided by a singular, straightforward mission—to ensure victims and their families have access to releasable information about a perpetrator and to offer assistance explaining the immigration removal process."

Source:
×
×

Welcome to National Journal!

You are currently accessing National Journal from IP access. Please login to access this feature. If you have any questions, please contact your Dedicated Advisor.

Login