Oil by rail draws new scrutiny after Canada disaster

This increasingly common mode of transport throughout North America is leading to heightened safety concerns.

By Bruce Kennedy Jul 8, 2013 9:21AM
Firefighters continue to douse burning wreckage on July 7, 2013 after a freight train loaded with oil derailed July 6 in Lac-Megantic in Canada's Quebec province (François Laplante-Delagrave/AFP/Getty Images)

Saturday's deadly and devastating train accident in a small town on the Canada-U.S. border is drawing new attention to the growing amount of crude oil being transported by rail from new production sites in South Dakota, Alberta and elsewhere in North America.

The 72-car freight train that derailed in the town of Lac-Megantic, Quebec (about 155 miles east of Montreal, 10 miles west of the Maine border and 185 miles north of Portland, Maine), was said to be carrying up to 2 million gallons of oil. The ensuing explosion killed at least five people and has left 40 unaccounted for, while flattening much of Lac-Megantic's downtown and forcing thousands of local residents to flee.

The Railway Association of Canada told the Portland Press Herald that Canadian railroads move about 230,000 barrels of crude oil -- about 9.7 million gallons -- every day. And quoting data from American Association of Railroads, Reuters said U.S. railroads have transported nearly 360,000 rail cars of crude and refined oil since the start of the year, up 40% from 2012.

Given the current lack of pipelines from booming deposits like South Dakota's Bakken oil fields and the Canadian oil sands in Alberta, Reuters noted the recent uptick in moving oil by rail "represents a small but important new source of revenue for big operators like Canadian Pacific Railway (CP)and Warren Buffett's BNSF (a subsidiary of Berkshire Hathaway (BRK/A)), which have suffered a drop in coal cargo."

"It is also a flexible and cheaper option to more expensive European or African crude for refiners like Irving Oil," the wire service added, "which confirmed on Sunday that the train was destined for its ... plant in Saint John, New Brunswick."

The ill-fated train's route would have taken it through Maine, a controversial issue since the crude oil trains began traversing the state in May of last year. Just last month, several people were arrested when a group of protestors tried to block one of the oil trains about 30 miles from the state capital of Augusta.

One of the people involved in that protest, Meaghan LaSala with the activist group 350 Maine, called the derailment and explosion in Quebec "devastating." She told the Press Herald: "It's also exactly what we were afraid could happen in Maine, or any community along the routes where crude is headed all across the country."

The accident could become a factor in President Barack Obama's pending decision on the proposed $5.3 billion Keystone XL oil pipeline from Canada to the American Midwest. The railroad industry is also closely monitoring the developments in Quebec.

"It's going to give the entire North American continent pause," Chop Hardenbergh, editor of Atlantic Northeast Rails & Ports, said in an interview with the Press Herald. "I don't think this is a Maine issue. It's a national issue."

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Jul 8, 2013 9:46AM
Environmentalists want to have it both ways.  They block the construction of pipelines, resulting in oil being shipped via rail.  Yet probably 99.5% of them drive cars, SUV's or trucks that create the demand for oil in the first place.  Make up your minds.
Jul 8, 2013 10:07AM
Although they are not perfect either a pipeline is better than this! Spills (although not this dramatic) will start happening at many more places as the volume of oil shipped by rail increases.
Oil will get to markets.  One way or the other.  There is no alternative to oil and gas today that justifies eliminating carbon fuels. 
Jul 8, 2013 1:16PM

In the earliest days, before pipelines, all crude oil was shipped by rail.



History is now running backwards...

Jul 8, 2013 5:19PM

I'd seriously hate to live with someone who believes every time an accident, tragedy, or unfortunate event happened, we had to immediately never do it again.


Burned your hand on the stove, throw the stove out!  Cut yourself with knife, get rid of it!  Bumped your little toe on the coffee table, toss it in the trash!


Things happen.  They aren't always pleasant, but no amount of regulation, ideas, and precautions will make things completely, 100% safe.

Jul 9, 2013 3:01AM
Pipelines are far more polluting and ALWAYS leak.

Keystone EXPORTER pipeline is 100% for exporting oil to drive the price here at home sky-high.
Exportation is a powerful price-fixing tool.

want $15 gasoline? Build Keystone and watch our country fall.

Jul 8, 2013 2:24PM
Hmm, so will this "accident" now justify Obummer in changing his mind into having a pipeline from Canada to the U.S.?
Just wondering.
Jul 8, 2013 4:28PM
The Rail Association of Canada said 99.9% of its rail cars finish their trips without issue. And according to this article, they also told the Portland Press Herald that Canadian railroads move about 9.7 million gallons every day.
So that means that in Canada almost 10,000 gallons a day or 3.5 million gallons a year have 'issues'... which seems a bit scary and pretty unbelievable. Not sure if this indicates a problem with rail transportation as much as a problem with math education.

Jul 8, 2013 2:44PM

A simple fix tax any new 2013 and up vehicle that gets less than 25 miles per gallon a $5000.00 surcharge  on there license plates each year. Exemption for a business vehicle that is not used for personal use, special plates and if used for personal use heavy fines. I am sick and tired with 4 wheel drive gas guzzler soccer moms and dumbells  driving on dry flat roads wasting my natural resources driving the price of fuel up. Suvs are proven more dangerous to occupants in accidents than cars.

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