CBR

There were three interesting stories in the last couple of days regarding CBR. First, the excellent RBN Energy post on gradual shift from CBR to pipeline in the Bakken. "Shift" might be too strong a word; "gradual shift" is closer to reality perhaps, but even that might suggest to some that CBR is waning more than one might imagine. Unless new flaring rules change things, I think the Bakken will need all the rail / pipeline they can finance.

The second story was a Bloomberg story sent to me by Don the other day:

When Aurora Mayor Tom Weisner sees rail cars full of crude oil rumble down the tracks that criss-cross his Chicago-area town, he often thinks about the derailment that killed 47 people almost a year ago in Canada.

The disaster focused attention on the design of the oil tankers, yet two-thirds of the tank cars in use today are still older models that safety experts say are vulnerable to puncture. The July 6 derailment last year in Quebec and seven other major ones in the U.S. and Canada since then have spilled more than 3 million gallons of oil, with some cars catching fire or exploding.

“You can see tanker car after tanker car go by on that rail constantly,” said Weisner, whose city is 40 miles (64 kilometers) southwest of Chicago and second to it in population in Illinois. [Tanker car after tanker car go by on that rail constantly: a hat tip to the environmentalists who apparently prefer rail to pipe.]

It's a very, very long Bloomberg story and well worth the read. 

Note to newbies: when news organizations report on spills, they often report the size of the spill in terms of gallons rather than barrels (gallons make the spill appear 42-times bigger than it really is). Three million gallons of oil = 70,000 bbls.

The three million gallons of spilled oil works out to about 85 cars, less than one unit train. Four accidents accounted for almost the entire amount including one spill of low-volatility western Canadian oil. [Spoiler alert: perhaps I'm overly sensitive, but that wiki-entry has a hint of anti-CBR bias.]

As long as I'm digressing, it's important to note that news articles tend not to provide denominators. For example, according to the article, in the past year, 3 million gallons of oil have been spilled by CBR. There is no number given for how much oil is shipped by rail. Remember, that 3 million gallons (70,000 bbls) is for an entire year in BOTH the US and Canada. To put that in perspective, the US alone is producing upwards of 9 million bbls/day, and importing about 6 million bbls (from memory; could be very wrong on exact amounts. That's per day. Seventy-thousand bbls represents and infinitesimal amount of the total amount of oil moving across the US and Canada each day. My hunch is that parking lots across the entire US see more dripping oil than that. [Disclaimer: I often make simply arithmetic errors.]

Finally the third article was in the July 4, 2014, issue of The Wall Street Journal:

LAC-MÉGANTIC, Quebec—A year after an oil-train explosion killed 47 people in this small town, residents are waking up to a new reality: The oil trains are probably coming back.

That upsets many of the town's 6,000 residents, who lost family, friends and neighbors when a 74-car train carrying crude derailed in the early morning of July 6.

But Lac-Mégantic probably has no choice.

Businesses here depend on the railroad; the railroad depends on crude. The region's sawmills and farms don't provide enough business for the railroad to be viable if it isn't also carrying lucrative crude oil, town officials say.

In mid-June, trains carrying nonhazardous cargo began travel through town on rebuilt track eastbound to the U.S. In all likelihood, service including crude will resume in January 2016, when a moratorium on carrying it through town expires. Lac-Mégantic wants to build an 8-mile-long detour to skirt the town and still serve regional businesses. But the chance that it will be finished in time is slim, if it gets built at all.

"We are working very hard to move this track but we are not in control," says Town Councilor André Desjardins. "If we don't have the train here, forget it, 1,000 employees will be without jobs." [Again, the town's population: 6,000.]

And so it goes.