Either support new pipelines or your community will be incinerated by an oil-carrying train.
It sounds outrageous, but it’s been a foundational argument made by the pro-pipeline lobby ever since the horrific Lac-Mégantic disaster in 2013.
“This is almost like putting a gun to the head of communities, saying ‘well, if we don’t build our pipeline then we’re going to put more oil-by-rail traffic through your community,’ ” says Patrick DeRochie, program manager of Environmental Defence’s climate and energy program.
On Dec. 20, 2016 — less than a month after the federal approvals of the Kinder Morgan TransMountain and Enbridge Line 3 pipelines — Prime Minister Justin Trudeau clearly stated that “putting in a pipeline is a way of preventing oil by rail, which is more dangerous and more expensive.”
The fact that it’s an oft-repeated sentiment shouldn’t overshadow the fact that this is a completely false binary.
Canada is hardly shipping any oil by rail. It never has.
And the only way that oil-by-rail shipments will seriously increase as predicted by the Canadian Energy Research Institute and National Energy Board is if Canada continues with its plan to allow for the massive expansion of Alberta’s oilsands in the coming decades, a move that will undermine calls for a moratorium on all new fossil fuel infrastructure in order to avoid the effects of catastrophic climate change.
Highest Amount Ever Exported by Rail Was Mere 178,000 Barrels Per Day
Here are the numbers on oil-by-rail.
In September 2016 — the most recent month reported by the National Energy Board on the subject — oil-by-rail exports to the United States were 69,292 barrels per day (bpd).
They had dipped as low as 43,205 bpd in June 2016.
This obviously reflects the extremely low per-barrel price that bitumen is fetching from American refineries, which is also why there’s currently around 400,000 bpd of spare capacity in the pipeline network.
Plus, oil-by-rail generally costs more than shipping oil by pipeline, making it an even less viable option in such economic times.
But rail shipments have never been particularly notable relative to total crude oil production.
In fact, oil-by-rail’s high point in recent years was in September 2014, when 178,989 bpd were transported to the U.S.
The same year, Canada was exporting a total of 2.85 million bpd. In other words, at its very peak, oil-by-rail accounted for a mere 6.28 per cent of total exports.
Newly Approved Pipelines Quadruple Capacity Historically Shipped by Rail
It should also be noted that not all oil transported by rail is exported to the States, with some simply transported to other parts of the country for storage or usage for purposes such as asphalt.
For instance, the Canadian Association of Petroleum Producers reports the oil-by-rail hit “almost 200,000 bpd by the end of 2013,” despite the NEB only reporting 166,570 bpd in rail exports during December 2013.
Domestic transport also helps explain why the Canadian Energy Research Institute reported in 2014 that about 35,000 bpd of oil-by-rail from Western Canada wasn’t exported to the United States (and thus not counted by the NEB).
Incredibly, nobody is keeping detailed, accurate numbers on oil-by-rail.
But we can assume — generously — that the highest oil-by-rail shipments have ever hit in Canada is 225,000 bpd (180,000 bpd in exports and another 45,000 bpd in cross-country transport).
The recent approvals of the Kinder Morgan Trans Mountain and Enbridge Line 3 pipelines will allow for the addition of 900,000 bpd in pipeline capacity from the oilsands, assuming a 15 per cent surplus for outages and maintenance.
That’s four times the amount of oil that has ever been shipped by rail, either for exports or domestic transport.
New pipelines are not about “displacing” oil currently being shipped by rail — there’s simply no evidence for that.
Instead, new pipelines are about preparing for a massive expansion of the oilsands by almost two million bpd between 2015 and 2040, and weaponizing people’s fears of oil-by-rail to do so.
Oil-By-Rail Unsafe Because of Regulatory Lack
But there’s a second and related key problem with the pipeline versus rail debate, further undermining the argument for new pipelines.
Specifically, that there are technologies and regulations available to ensure that oil being shipped by rail is far safer than what the current rules mandate.
As a result, combined exports and domestic transport via rail could even rebound to 200,000 or 250,000 bpd and we’d never have to seriously worry about a Lac-Mégantic-like disaster again.
Transport Canada could require rail companies to increase the number of inspectors and crew members on trains, reduce speed limits and require certain braking system protocols and better public disclosure.
The phase-out of the old CPC-1232 tank railcars and transition to new and safer TC-117 tank railcars could be accelerated. The federal environment minister could be required to order an environmental assessment of oil-by-rail projects, as recommended in September 2016 by NDP MP Linda Duncan.
‘Neatbit’ Would Reduce Risk of Explosions and Spills, But Initially Increase Costs
And then there’s the increasingly popular idea of “neatbit.”
Bitumen from the oilsands is current shipped in both pipeline and train in a form called “dilbit,” which requires about 30 per cent of diluent to allow it move. The diluent, usually made of a natural gas-based condensate, makes the mixture highly flammable, explosive and difficult to contain in spills.
These characteristics are dangerously compounded in the case of train accidents.
Conversely, “neatbit” only requires one to two per cent of diluent.
The product thus has the consistency of peanut butter, meaning it won’t flow in the event of a spill. It also doesn’t catch fire or explode.
David Hughes, expert on unconventional fuels and author of multiple reports for the Canadian Centre for Policy Alternatives (CCPA), says: “In effect, shipping raw bitumen by rail is likely a safer alternative than pipelines.”
Shipping bitumen as neatbit would arguably save companies money in the long term. But it would also require a bit of upfront capital, and policy direction from governments.
Heavy oil refineries don’t have the infrastructure to receive it. It would take longer to unload. Upstream companies would have to build diluent recovery units and invest in insulated tank railcars with heated coils to keep the bitumen somewhat soft during transport.
And unlike pipelines, oil-by-rail doesn’t result in a “carbon lock-in” given that many other commodities can be transported by rail.
Bruce Campbell of the CCPA has concluded the oil industry “is not in any hurry to make the transition because of the (relatively modest) upfront investment.”
Kai Nagata of the Dogwood Initiative agrees: “The oil companies don’t want to do anything that is inconvenient or that would require them to build new facilities or spend more money. So far, I don’t think there’s much interest in moving that inert form of bitumen in regular rail cars.”
‘It’s Purely Out of a Profit Motive That They Invoke the Comparison’
Not only is it deceptive to claim that new pipelines are needed to replace oil-by-rail, but it also ignores the fact that oil-by-rail can be made much safer than it is at the moment (although it will continue to be more carbon-intensive due to its current reliance on diesel as fuel).
Yet Lac-Mégantic continues to be subtly weaponized by corporate execs and politicians as if these two facts aren’t true, or even worthy of acknowledgement.
Oil-by-rail has never been a major player in Canada. It never will be if international climate commitments are honoured. And even if it is used as a way to offer some flexibility to producers, it can be done in a way that’s safer than current practices require.
Nagata suggests that such players are relying on people’s fears about a non-issue in order to force them to a point of compromise that would allow them to build pipeline expansion infrastructure.
“It’s purely out of a profit motive that they invoke the comparison,” he says. “Not out of any sense of concern for the safety of communities along the route.”
DeRochie agrees: “It’s a legitimate concern. And I think the oil industry grasped onto that and used it as a scare tactic to push pipelines.”
Image: Derailed oil train cars in the light of the Lac Megantic fire. Photo: Canadian Transportation Safety Board via Flickr (CC BY-NC-ND 2.0)