Shipping Crude Oil by Rail: New Front in Tar Sands Wars
The wreckage of a freight train loaded with oil that derailed in Lac-Megantic in Canada's Quebec province is shown July 7, 2013.
Photo Credit: AFP
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On New Year's Eve 2009, a train with 104 tank cars of light crude oil traveled 1,123 miles from North Dakota's Bakken oil fields to a terminal in Stroud, Oklahoma, and opened a new front in the war over development of Canada's tar sands.
It didn't seem that way at the time. EOG Resources, the company that owned the oil, simply needed a way to get its crude out of North Dakota, where production since the advent of oil fracking there nearly a decade earlier had far exceeded the capacity of available pipelines and trucks. The 2009 shipment is now considered a bellwether event, marking the first significant movement of U.S. crude oil by rail in many decades. Less than four years later, railroads have shipped as much as 600,000 barrels a day from the Bakken and are transporting crude not just from North Dakota but from oil-fracking sites in Montana, Texas, Utah, Ohio, Wyoming, Colorado, and southern Canada. Across North America, trains are now moving nearly a million barrels of crude a day, and that number will continue to grow rapidly.
A million barrels a day is more than the capacity of the controversial Keystone XL pipeline, 830,000 barrels — a fact that has led some oil industry analysts to declare that heavy crude from Alberta's tar sands will find a way to refineries regardless of Keystone XL's fate. Even The New York Times has supported this claim. An October 30 Times news story, headlined "Looking for a Way Around Keystone XL, Canadian Oil Hits the Rails," said, "Even if President Obama rejects the pipeline, it might not matter much" because of rail's emergence. That's also the prevailing view at the U.S. State Department, whose March 2013 environmental assessment of Keystone XL concluded that rail "should be capable" of transporting all tar sands crude even "if there were no additional pipeline projects approved."
Tar sands advocates are happy to promote the idea that continued development of the tar sands is inevitable because it implies that opposition to Keystone XL is futile and that Americans should therefore cash in on its jobs and construction expenditures before somebody else does. However, as tar sands opponents point out, much evidence suggests that this conclusion is at best premature and perhaps flat-out wrong.
What is certain is that rail has now joined a half-dozen proposals for tar sands pipelines as an arena of contention, with the future of the Florida-sized Alberta basin of western Canada at stake. Just as pipeline safety has been a key issue in the Keystone XL debate, this development has raised questions about the safety of crude-by-rail to new prominence, especially since a tanker accident in Quebec last July that killed 47 people. With these safety questions, such arcane matters as the design of tank cars and the carbon-hydrogen ratio of their contents have taken on heightened importance. How regulations governing these issues are decided will help determine whether the tar sands basin — the world's largest fossil fuel reserve outside Saudi Arabia — stays close to its current production level of 1.8 million barrels a day or expands to four or five times as much, as its developers hope. That in turn will have a significant impact on climate change's intensity in coming decades.
Of the million barrels now being shipped by rail in North America, only a small fraction — around 50,000 barrels — consists of the "heavy crude" that is produced in the tar sands; the rest is "light crude" from southern Alberta, Saskatchewan, and the U.S. Light crude is hydrogen-heavy and carbon-light; its high hydrogen content enables it to flow easily but also makes it alarmingly explosive. Bitumen, the chief constituent of heavy crude, is the opposite, carbon-heavy and hydrogen-light, as viscous as peanut butter, unable to flow through pipelines unless diluents are added to it, but also unable to be loaded into railcars unless it is heated or diluted. Heavy crude is therefore more expensive to transport by rail than light crude, which is one reason tar sands crude lags far behind light crude in rail shipments. Another is that few rail cars are equipped to carry heavy crude. Some oil industry analysts predict that both obstacles will eventually fall away, leading to massive heavy crude transport by rail, while others think that rail will never serve more than a niche market, serving newly developed oil fields only until pipelines to them are built.