Oil on the tracks: what’s the cost of shipping more oil by rail?
Protests may have halted the progress of pipelines, but oil is still chugging along as exporters rely more on rail to get their product to market.
According to the National Energy Board’s latest statistics on Canadian crude oil exports by rail, May saw almost 199,000 barrels shipped per day, up 52 per cent from the same month the year before.
The growing use of trains to ship oil is raising concerns from agricultural and environmental advocates, who are questioning capacity on the tracks and the hazards of transporting dangerous goods by rail.
The Canadian Association of Oil Producers’ 2018 crude oil forecast pegged Canadian production for 2017 at 4.2 million barrels per day, and expects it to reach 5.6 million barrels per day by 2035.
According to Scotiabank, pipeline approval delays have hurt Canada’s economy and could add up to a $15.6billion ding this year, but a shift to transporting oil by rail could cushion the projected blow to $10.8 billion.
Beth Lau, manager of crude oil supply and transportation for CAPP, said that alternatives depend on the product, but range from transporting by truck, which moves smaller volumes, or by rail, which is generally more expensive than by pipe.
“The other option, which isn’t an option per se, is whether you hold it back in storage,” Lau said. “Then it’s not being moved to market.”
After breaking ground at a stockpile yard for the Trans Mountain pipeline expansion project just west of Edmonton in July, both Alberta Premier Rachel Notley and federal Minister of Natural Resources Amarjeet Sohi pointed to the economic importance of pipeline development and getting oil to foreign
But there is still no scheduled completion date for the project, which is expected to nearly triple the volume shipped along the existing pipeline, from 300,000 to
890,000 barrels per day. According to Kinder Morgan Canada president Ian Anderson, pipe won’t hit the ground until early 2019. Continue reading the story at thestar.com/edmonton
According to the National Energy Board, more oil is being shipped by rail.