One If By Rail, Two If By Pipeline

Though this has been an ongoing phenomena, the news media is finally picking up on the fact that the Canadian oil sands is already being transported through the United States:

“Railroads are booming, and it’s not because of the rising cost of gas or a consumer return to an older form of transportation. It’s oil,” reports the well-known and highly respected stock market news and financial analysis website Seeking Alpha. “Railroad stocks are ready to leap on booming oil transportation.”

The boom started in January, when President Obama denied approval for pipeline operator TransCanada’s proposed $7 billion Keystone XL pipeline, which would carry oil from Canada’s oil sands to U.S. Gulf Coast refineries. “This denial started a train in motion—literally—as oil and petroleum exploration and development companies looked to the railroads to transport raw materials to refineries and refineries looked for efficient methods of distribution,” says Seeking Alpha. “Without pipelines (according to Energy & Capital, there are currently no pipelines running internationally between the U.S. and Canada), trains are the best way to move the oil south to the big refineries along the Gulf coasts.”

The U.S. Energy Information Administration (EIA) says rail deliveries of oil and petroleum rose almost 40% in this year’s first half. BNSF, the biggest railway mover of crude in the U.S., posted an increase of 60% in carloads of crude oil and petroleum products during that period.

BNSF expects its oil business to grow. According to Reuters, the railroad recently “expanded its capacity to transport 1 million barrels-per-day of shale oil from the Bakken formation in North Dakota and Montana in 2012, a 25% increase from a year earlier. BNSF expects to use a quarter of this capacity in 2012. Still, with 88.9 million barrels of Bakken crude shipped on its railcars in 2012, it will witness a nearly 7,000% growth since it started shipping by rail five years ago.”

What does this mean? It means that efforts to block the KeystoneXL Pipeline were effectively worthless, because the oil is being taken out of the grown and transported to refineries even absent the KeystoneXL Pipeline. This was one of many reasons why the efforts of professional environmental groups to block the KeystoneXL Pipeline were misguided.

And as it turns out, transporting oil via railroad is actually much more dangerous than transporting it via pipeline (and slightly more expensive)! According to the Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (or DoT-PHMSA if you prefer):

How safe are pipelines? What are the statistics?

Pipelines are the safest and most cost-effective means to transport the extraordinary volumes of natural gas and hazardous liquid products that fuel our economy. To move the volume of even a modest pipeline, it would take a constant line of tanker trucks, about 750 per day, loading up and moving out every two minutes, 24 hours a day, seven days a week. The railroad-equivalent of this single pipeline would be a train of seventy-five 2,000-barrel tank rail cars everyday. These alternatives would require many times the people, clog the air with engine pollutants, be prohibitively expensive and — with many more vehicles on roads and rails carrying hazardous materials — unacceptably dangerous.

Relative to the volumes of products transported, pipelines are extremely safe when compared to other modes of energy transportation. Oil pipeline spills amount to about 1 gallon per million barrel-miles (Association of Oil Pipelines). One barrel, transported one mile, equals one barrel-mile, and there are 42 gallons in a barrel. In household terms, this is less than one teaspoon of oil spilled per thousand barrel-miles.

Pipelines also generally have a better safety record (deaths, injuries, fires/explosions) than other modes of oil transportation. For example, compared to the pipeline record, there are 87 times more oil transport truck-related deaths, 35 times more oil transport truck related fires/explosions, and twice as many oil transport truck-related injuries.

The media loves to report favorably on the efforts of radical environmental groups to decrease our oil consumption. Will any media outlets report on how their efforts are counter productive (the nixing/delay of the Keystone Pipeline has lead to more rail transportation, which is more dangerous!), or will we continue to see piece after piece praising their efforts?


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