Oil on the tracks: what’s the cost of ship­ping more oil by rail?

StarMetro Edmonton - - EDMONTON - HAMDI ISSAWI

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.

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