For the last three years, Canada has lagged the United States in using its rail system to haul crude oil, hindered by a lack of loading terminals and a shortage of specially built rail cars that reheat viscous oil sands crude.
Now it's on the brink of catching up. Over the next 12 months, producers like Cenovus Energy Inc and logistics firms like Gibson Energy Inc will load up mile-long dedicated trains with ultra-heavy bitumen oil and move them thousands of miles in heated and coiled rail cars that eliminate the need to dilute the crude for pipeline shipments.
Yet they are opening up a new phase in the oil-by-rail boom at a moment of deepening uncertainty. An oil-train derailment that killed 50 people in Quebec has cast a shadow over the controversial practice and could raise new hurdles.
For the moment, the handful of new projects to potentially quadruple the amount of oil sands crude shipped by rail are moving ahead. Exports could soon rival U.S. shale oil rail shipments, currently three times greater than Canada's.
James Cairns, vice president of petroleum and chemicals at Canadian National Railway Co, said in Calgary this week that companies were moving at "breakneck speed" to overcome nationwide shortages of both infrastructure and rolling stock.
"In my 26 years in the rail business I have never seen this much massive investment in CN lines by our customers to get their products onto our railways," Cairns said. CN, the nation's largest carrier, expects to more than double last year's 30,000 carloads of raw bitumen and crude this year.