alizes in transportation.
“I don’t think that the costs themselves would be a basis for not making change and I think both U.S. and Canadian regulators are likely to be making rules and stiffer standards given the broad consensus that they’re seeing.”
Both pipeline and rail industry associations say their product gets to its destination safely more than 99.9 per cent of the time.
Many oil executives have said that while they consider both modes of transport safe for crude transport, but pipelines are the preferred means in the long run, with rail playing a complementary role.
On a November investor webcast, executives with pipeline giant TransCanada Corp. stressed the importance of building new pipelines to get oilsands crude out of Alberta to market.
“We’ve seen an increase in rail movement, which has put public safety at risk,” CEO Russ Girling said.
TransCanada (TSX:TRP) has been seeking U.S. approval to build its controversial Keystone XL pipeline for more than five years and expects a decision some time in 2014. The U.S. environmental movement has rallied against that pipeline, which would enable oilsands crude to reach Texas refiners.
Without adequate market access, oil producers are getting less money for their oil, Alex Pourbaix, president of energy and oil pipelines, told the webcast.
“However, producers obviously are not standing still,” he said.
“With delays in getting our (U.S.) Presidential Permit, rail is increasingly filling the gap represented … and it will continue to do so until projects like Keystone XL are built.”
By the end of 2015, Pourbaix said, there will be more than 800,000 barrels per day of rail loading capacity in Alberta — nearly the size of Keystone XL, if it’s built. That’s double what it is today.
A draft environmental impact statement by the State Department in March cited growth in crude-by-rail in its determination that Keystone XL alone would not affect the pace of oilsands development.
But it’s important to keep growth in crude-by-rail in perspective, said Bourque, noting only about three per cent of the oil transported in North America moves by train.
Unlike the regulatory process for pipelines, there’s no formal forum for Canadians to have a say about increasing carloads of crude passing through their communities. Greenpeace’s Stewart said that’s likely to move citizens to take action, such as blockading rail lines.
Stewart agrees the older rail cars must be phased out “rapidly,” but he’d like to see a host of other regulatory changes as well.
Unit trains — more than 100 cars, each filled with hundreds of barrels of crude, linked together in one train — are too dangerous and shouldn’t be allowed, he said.
“The consequences of when something goes wrong are so much greater for unit trains than when you’ve got four or five carloads together.”
He urged Canadians must work to make sure nothing like Lac Megantic happens again.
“This is a major threat to community safety, to our environment and it’s something we can greatly reduce the chances of this ever happening again and we should,” he said.
“And my concern is that as the memory of that tragedy begins to fade, nothing will change.”