walter russell mead peter berger lilia shevtsova adam garfinkle andrew a. michta
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Oil by Rail Fail
No One Wants These Rail Oil Tankers

Oil booms in North Dakota’s Bakken shale formation and Alberta’s oil sands have left producers scrambling for ways to get their crude to market. Both regions have seen production develop faster than the infrastructure necessary to transport oil to refineries, and as such, drillers have been forced to get creative. Lacking pipelines, the most robust and cost-effective option for these kinds of massive onshore operations, producers have been sending their crude by rail, but in doing so have run the very real risk of explosive derailment.

As more and more crude rides the rails, the risk of disasters like the kind seen in Quebec’s Lac Megantic last summer increases, which explains why the Department of Transportation has been preparing rules to phase out older train cars seen as particularly vulnerable to rupture. So as not to unduly upset the railroad industry, the DOT has pointed out that Canadian producers will be able to use the retiring cars to ship tar sands oil, which is a less explosive variety than Bakken shale crude. But Reuters reports, it looks like Canada won’t want to use these older tankers to transport oil, either:

[P]lans would modernize the current U.S. fleet of roughly 90,000 tank cars with puncture-resistant shells and other costly upgrades that government and industry sources expect to cost more than $3 billion…The U.S. Department of Transportation has said the transition will be eased with about 23,000 existing cars going into service to cart Canadian oil sands crude – a molasses-like fuel, bitumen, that is less flammable than ordinary crude oil.

“No cars will retire as a result of this rule,” the DOT’s Pipeline and Hazardous Materials Safety Administration (PHMSA) said in its oil train proposal released in July. […] But industry experts said it is not feasible to simply retrofit the older cars to the specifications needed to carry oil sands, making it likely thousands of cars will be scrapped.

One can understand why oil-by-rail arose in the first place, given how quickly the shale boom and development of Canadian oil sands have come. But what were meant initially to be stop-gap measures are now being perceived as more permanent solutions because we’re not building pipelines to connect these new oil reserves with refineries. And so, while the U.S. and Canada dicker over what to do with prone-to-puncture rail cars, the eminently more sensible option—the Keystone XL pipeline—languishes in political purgatory.

When it comes to transporting crude, pipelines are safer and more efficient than railroads. That, if for no other reason, ought to compel President Obama to approve the Keystone pipeline.

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  • Andrew Allison

    A typical terrible waste of time and money. The environmental benefits of shipping the oil via pipeline are overwhelming. Spills aside, consider the CO2 emissions of the trains and tanker trucks being used.

    • Curious Mayhem

      But what if Warren Buffet bought a rail company that ships oil and then donates heavily to Obama?

  • truthsojourner

    Even better solution: build Keystone and upgrade the tanker fleet.

    • Curious Mayhem

      The tanker fleets should be phased out, and the best way to do it is for them to pay real insurance rates on the risks they pose.

  • Fat_Man

    “A Climate Crusader’s Comeuppance: Billionaire Tom Steyer’s vow to make politicians toe the green line isn’t working out so well.” By Kimberley A. Strassel

    http://online.wsj.com/articles/kim-strassel-a-climate-crusaders-comeuppance-1408057542

    “As political comedowns go, there may be few to compare to the humbling of Tom Steyer. Six months after the climate activist roared on the national political scene vowing $100 million to impose his agenda on this fall’s midterms, it would appear that this billionaire don’t hunt.”

    “His February vow was to match $50 million of his money to $50 million from donors, and he bragged that might be a “lowball” number. By last month, Politico was reporting that NextGen had raised all of $1.2 million. Seems Democratic donors have higher funding priorities than climate.”

  • Jacksonian_Libertarian

    This is all Obama’s fault, he has blocked the development of pipelines at the behest of the Environmental lobby. Who’s foolish actions have now put the environment at risk from train derailments, increased the cost of oil transport, and did nothing to advance the cause of the bogus “Global Warming” they claim is their goal.

  • Curious Mayhem

    Google “lac-megantic quebec” and behold the horror that an exploding tanker train can wreak. No pipeline can do that kind of damage, either to humans or the birds and the bees.

  • David E.M. Thompson

    “ought to compel President Obama”
    Obama is compelled to reduce the production and distribution of all fossil fuels and to raise their prices. That was one of his 2008 campaign promises, and no one seems to have believed him.

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