Wall Street Journal (@WSJ) July 08, 2013
At least five people were killed in Lac-Mégantic, Quebec on Saturday when an unmanned tanker train derailed and destroyed much of the city center. Monique Muise considers the catastrophe in the context of the North American shale boom:
Even if the disaster in Lac-Mégantic prompts more stringent oversight, the sheer volume of crude oil traveling along Canadian railways means that future accidents–both large and small–may be inevitable. According to the Railway Association of Canada, approximately 230,000 barrels of oil are transported by rail in North America every day. In Canada, the amount of crude oil being moved in this manner has skyrocketed since 2010, feeding an increasing demand for fuel across the country and abroad. As industry executives, governments and environmental groups have waged war over pipelines, the railways have picked up the slack. In the past two years, the volume of crude chugging along Canadian tracks has reportedly quadrupled. The traffic is only expected to increase in the coming decade with the development and expansion of oilfields in both North Dakota and Alberta.
Marianne Lavelle details why crude producers have turned to rail transport as an alternative to pipelines:
North America’s new hot oil production centers, the Bakken shale in North Dakota and the oil sands of western Canada, aren’t well tied into [the existing] pipeline network. The price of crude oil is now high enough that the additional cost of paying to transport it by train has not been a hindrance for the oil industry in North Dakota, the U.S. State Department said an extensive market analysis related to the decision whether to approve the controversial Keystone XL pipeline from Canada to Texas.
Rail transport of oil has been slower to develop out of Canada’s oil sands. But State Department analysts foresee it growing–one of the key reasons they concluded that the Keystone XL, if built, would have minimal impact on greenhouse gas emissions. The carbon-intensive oil of Canada’s tar sands will get to market, with or without the pipeline, they argued; it will move by rail.
But Alec MacGillis argues the Lac-Mégantic disaster might turn public opinion against rail and new pipelines:
The environmentalist opponents of Keystone argue that the pipeline should be blocked so that high-emissions tar sands oil stays in the ground in Alberta rather than being burned and thereby exacerbating climate change. The pipeline’s boosters have countered that the tar sands will be developed and exported regardless of whether the pipeline is built or not—whether by pipelines crossing British Columbia for export to oil-hungry China, or by rail to the Atlantic or Gulf Coast. That was the gist of the State Department assessment that found that Keystone would not significantly increase emissions compared with other routes of export.
That basic claim—that the tar sands will make it out no matter what—has taken some hits of late, though. An in-depth Reuters analysis in April challenged the State Department assessment, raising serious questions about the economic feasibility of transporting large quantities of tar sands oil by rail. Then came word last month that the provincial government of British Columbia had, on environmental grounds, rejected a proposed pipeline to carry tar sands oil to ports for export to China.
And now comes the dreadful spectacle in Quebec, which puts another damper in the notion that it’s going to be a breeze to export vast quantities of tar sands by rail. It’s increasingly becoming clear that the reasons that the Canadians are pushing so hard for Keystone is because they, well, really need Keystone.