- The Washington Times - Tuesday, July 9, 2013

The deadly derailment and explosion of rail cars carrying crude oil through Quebec last weekend highlighted the dangers of the growing trend of shipping more fuel by rail in the U.S. and Canada, and analysts say it may add to pressure on President Obama to approve the Keystone XL pipeline.

Environmentalists have warned loudly about the dangers of pipelines that might taint groundwater or foul the environment, but such risks pale in comparison with the worst-case accidents that can and do occur if fuel is transported by rail and river barge.

The existing network of rail lines used to transport oil in the U.S. and Canada goes through numerous towns and major cities and crosses important waterways on which millions depend for basic water needs — making even minor accidents fraught with peril.

“It’s been a real shame that activists have pushed the public to sway so much from pipelines, which are likely much, much safer over time,” said Arthur Salzer, chief executive of Northland Wealth Management. “It is going to be something that’s going to weigh on the public’s mind.”

On Saturday, a runaway train that was transporting U.S. shale oil from North Dakota to a Canadian East Coast refinery in New Brunswick derailed in the picturesque Quebec town of Lac-Megantic, engulfing the town center in a fireball that killed at least 15 people and left nearly 40 missing.

In addition to the major loss of life and incineration of the town center, Canadian authorities are investigating whether the incident jeopardized water supplies, as about 638 barrels of the crude oil spilled into the Chaudiere River, which feeds into the St. Lawrence and affects consumers on both sides of the border.

While this and other recent rail accidents are under investigation and appeared to involve human error, similar trains loaded with hazardous and highly explosive fuel nearly every day can be found on rail lines connecting Midwestern well sites in North Dakota, Alberta or Texas to refineries on the East Coast in Philadelphia or New York, with the same potential for tragic accidents.

Rail traffic carrying oil nearly tripled last year and is on course to multiply further in the months ahead. Unprecedented amounts of crude oil are being ferried by river barge, posing further hazards for the public and environment along the Mississippi River and other major waterways.

For safety and other reasons, pipelines have long been the preferred method for shipping crude to and from the refineries, which turn it into gasoline and other products for consumers.

By various estimates, pipelines are three to six times safer than rail or barge for transporting oil. Once they are built, pipelines are three times cheaper to operate and offer a far more efficient and reliable way to funnel fuel to market.

Until the recent discovery of large stores of shale oil in the Midwest, pipelines accounted for nearly all of the shipment of crude oil from well to refinery in the U.S., according to the Association of Oil Pipe Lines.

“Pipelines remain the preferred method for transporting petroleum and refined products in the U.S. for good reason: They are the safest, cheapest and most reliable,” said association President Andy Black.

“Railroads never were a substitute for pipelines,” but rather are best viewed as a stopgap measure until pipelines can be built, said Garland Chow, an associate business professor at the University of British Columbia.

Mr. Chow is concerned about talk of shipping nearly half of the Canadian crude oil extracted from Alberta’s vast oil sands by rail if Mr. Obama does not approve the Keystone XL pipeline to ferry the oil to U.S. Gulf Coast refineries. Canada hopes to pump as much as 5 million barrels a day eventually from the oil sands.

“The volume of crude that is forecast to be shipped out of Alberta simply cannot be transported by rails,” Mr. Chow told Bloomberg News.

But worries about the pipeline being killed by environmental opposition in the U.S. have prompted oil companies operating in Canada to explore rail lines to market the oil as well as building pipelines to Canada’s east and west coasts, where the crude can be shipped to customers in Asia and Europe.

Environmentalists oppose the Keystone pipeline, which also would carry crude out of the Bakken formation in North Dakota that was involved in the Quebec accident, because of the potential for spills along its route in the Midwest and the release of greenhouse gases from extracting and burning the oil.

But energy analysts say that forcing oil companies to resort to rail shipments would only raise the odds of environmental and public safety disasters such as the one in Quebec while increasing greenhouse gas emissions.

Because train tracks traverse many city neighborhoods and urban waterways in the heavily populated Midwest and along the East Coast, even minor train collisions can result in oil releases that pose public hazards.

While spills from pipelines are larger on average and can be devastating for the environment, they often pose less of a public hazard as pipelines typically traverse more remote and less-populated terrain.

Most of the proposed Keystone pipeline, for example, would traverse sparsely populated areas of the Canadian and U.S. Midwest as it travels to oil refineries grouped on the Gulf Coast in Texas and Louisiana.

“It is plain and obvious that rail transportation of oil and gas is more expensive and riskier than pipeline,” said Michael Blair, a retired Canadian automotive supply executive. Environmentalists hope to derail not only the Keystone project but, by killing the pipeline, prospects for pumping massive amounts of oil from the Canadian tar sands.

Mr. Blair said that strategy won’t work. “The oil sands will develop with or without Keystone. The question is whether the oil will be shipped to Canada’s coasts and exported to Europe or Asia or whether it will be piped to the United States.”

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