Keystone XL Pipeline Derailed?

Impatient oil companies associated with the project build rail terminals to deliver oil from western Canada to U.S. refineries in the Gulf Coast.

The New York Times reported yesterday that regardless of President Obama’s acceptance or rejection of the Keystone XL pipeline, the oil companies associated with the project are building rail terminals to deliver oil from western Canada to the United States’ Gulf Coast, for further export to Asia.

According to the Times, since July, plans have been announced for three large loading terminals in western Canada with the combined capacity of 350,000 barrels a day—equivalent to roughly 40 percent of the capacity of the proposed Keystone XL pipeline. Overall, Canada is poised to quadruple its rail-loading capacity over the next few years to as much as 900,000 barrels a day, up from 180,000 today.

Concerns remain from many, especially when considering the safety of rail transport. As reported by National Public Radio (NPR), the July derailment in the lakeside Quebec town of Lac-Megantic, left 47 people dead and destroyed parts of the city. Beneath the city’s remaining buildings, cleanup crews discovered that much of downtown was saturated with heavy metals, including lead, arsenic and copper, as well as thick crude oil, which left many areas contaminated and uninhabitable.

The Times further reported this month a train carrying crude oil and liquefied petroleum gas derailed west of Edmonton, causing an explosion and fire and forcing the evacuation of a town. Last month, a Canadian National Railway Company train carrying lubricating oil, ethanol and natural gas liquids between Winnipeg and Edmonton derailed in Saskatchewan, leading to a leak on farmland and well-publicized comments by Saskatchewan’s premier, Brad Wall, that the accident underscored the need for more pipelines to safely move petroleum products.

Shipping oil by rail is generally more expensive than by pipeline, but oil companies working in North Dakota made a critical innovation—leasing complete 100-car trains dedicated to oil rather than the traditional train that ships a variety of products. By shipping directly from the oil fields to refinery depots, the companies sped deliveries and lowered costs.

Opponents of the Keystone XL pipeline want to keep the oil sands in the ground. They say emissions from development, whether through mining or steam heating out of the ground and followed by upgrading for shipment, cause more harm than those that come from extracting most conventional crude oil.

Proponents say that Canadian heavy oil is no more environmentally harmful than some crude oils already used in the United States, and that it would replace similar crudes from Venezuela and Mexico that are refined on the Gulf Coast.

For more information about the Keystone XL pipeline, including a map of the proposed pipeline from western Canada through six U.S. states, please also see or click here.

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