CBR Is Here To Stay -- The Journal

Updates

July 19, 2013: rail is here to stay. AP is reporting:

But experts say the oil industry's growing reliance on trains won't be derailed anytime soon. Unless new pipelines are built, there's just no other way to get vast amounts of oil from North Dakota and Rocky Mountain states to refineries along the coasts, which are eager for cheaper, homegrown alternatives to imports brought in by boat. 

"Stopping crude by rail would be tantamount to stopping oil production in a lot of the places it is now being produced," says Michael Levi, who heads the Council on Foreign Relations' program on energy security and climate change.

Even safety experts worried about the dangers of shipping oil by rail acknowledge that the safety record of railroads is good — and improving. The scope of the Lac-Megantic disaster, which is still under investigation, appears to have been the result of uniquely bad circumstances, these experts say.

"Rail is going to remain a significant part of the way we move crude around the country for a long time," says Jason Bordoff, head of Columbia University's center on global energy policy. "I don't think this rail accident will significantly change that."

Original Post

From the Wall Street Journal:

Fracking has been a boon to railroads not just because of a huge jump in crude-by-rail shipments—from nearly nothing to 300,000 annual carloads in half a decade.

Railroads have also booked rapidly growing revenues delivering "frac sand"—used in hydraulic fracturing of wells. Last year trains moved at least 200,000 carloads of frac sand. In Wisconsin alone, more than 100 frac-sand mines now are operating.

Then there's the downstream traffic boom: chemicals, plastics, natural gas liquids.

In fact, the evidence is mixed on whether pipelines or railroads are safer for transporting oil, and may not be relevant, industrially or politically. Rail shipping is likely to keep growing no matter what happens with the Keystone pipeline, over which President Obama has been perfecting his Hamlet impersonation.

Rail offers flexibility, allowing shippers quickly to redirect supplies to wherever they are most valued. What's more, East and West Coast refineries, like the one in Saint John, New Brunswick, toward which the MM&A train was headed (displacing North Sea oil), are not convenient to the pipeline network and likely never will be. And when it comes to Alberta tar sands, rail has another advantage: Before Canada's sludgy bitumen can even be handled by a pipeline, it must be diluted with natural gas condensate, often shipped all the way from the Gulf Coast.

But that was not what the article was all about. That was just the lead in to the issue -- the recent runaway freight train, explosion, destruction of a small town.

The bottom line:

Let's be serious about environmental opposition. Environmentalists are not opposed to pipelines, aka Keystone; they are opposed to fossil fuels. They will oppose both Keystone and oil shipping by rail with perfect consistency. Their goal is to raise the cost of using fossil fuels and to punish politicians who don't move their way on regulating carbon.

There will be a lot of things said and written about the disaster in Quebec, but there are a lot more hazardous things that crude oil being hauled. Rail is here to stay.