Train vs. pipeline: What's the safest way to transport oil?

At approximately 1:00AM Saturday morning, a train carrying crude oil and liquefied petroleum gas derailed and exploded outside of Gainford, Alberta, about 80 kilometres west of Edmonton. The 134-car freight train departed Edmonton earlier that evening, destined for Vancouver on the Canadian west coast. CN Rail Chief Operating Officer Jim Vena confirmed that 13 cars derailed, but that only three of those cars caught fire.

Thankfully, no one was injured but approximately 100 Gainford residents were evacuated from their homes as a precautionary measure. The heat from the train wreck was so intense that local firefighters made the decision to simply allow it to burn itself out, instead of attempting to extinguish the flames. This latest incident highlights the increasing frequency of these types of events. (Related article: Pipeline Companies Struggle Against Rising Competition from Rail)

Saturday’s accident is the third such CN derailment in the past month, occurring only two days after four CN rail cars carrying anhydrous ammonia derailed and forced residents of Sexsmith, Alberta to evacuate their homes. That accident followed another derailment on September 25, when 17 CN rail cars carrying petroleum and other chemicals came off the tracks in western Saskatchewan. 

While no one was injured in those derailments, it has been just over three months since the tragic Lac-Mégantic disaster in July that claimed 47 lives and decimated the center of the Quebec town. That incident served to shine a spotlight on the booming oil-by-rail industry and the risks it brings in both Canada and the United States.

This type of rail traffic is increasingly becoming the “new normal as we have movements of crude-by-rail skyrocketing at a time when the safety standards have not been kept up,” said Keith Stewart, a campaign coordinator with Greenpeace. The increase in oil-by-rail traffic has been significant, and it is expected to increase a further 400% by the end of next year. Drastic increases in North American oil production has put strain on existing pipelines and the construction of new pipelines has proved politically difficult.

Transport Canada has introduced new safety standards in light of revelations that the crude oil in the Lac-Mégantic disaster was mislabelled, and was far more explosive than previously thought. The new standards require strict testing and labeling of any crude being transported by rail and requires any untested oil to be shipped with the highest possible hazardous rating. These new rules are expected to further increase the cost of shipping oil by rail.

The public debate about the trade-offs between rail and pipeline transportation is relatively new. However, most evidence thus far has found that pipelines are safer but have a higher leak-rate than rail. On top of the safety record, one must also consider the cost differential between the two transportation methods—it costs about $7 to transport a barrel of oil from Alberta to the U.S. Gulf Coast by pipeline compared to between $15.50 and $31 for the same trip by rail. (Related article: Oil Traders Butt Heads over Kashagan)

“It can’t be an either or conversation,” said Alison Redford, Alberta’s premier, last month when confronted with reports of plans to ship Albertan bitumen to Prince Rupert, British Columbia by rail in order to bypass the stalled Northern Gateway pipeline. However, while rail is convenient in the short term, the province still requires massive increases in pipeline infrastructure. “In terms of our long term prospects for production, I think it will become more and more challenging to ship by rail and that’s why we continue to need pipe,” Redford added.

I think it is safe to say that the ever-growing number of derailments could be classified as one of those “challenges” the Premier was referring to.

Original article: http://oilprice.com/Energy/Energy-General/Another-Canadian-Oil-Train-Derailment-Punctuates-Crude-Transportation-Debate.html