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Obama Keystone Block Booms Railroads

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Mike

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A Canadian railroad carrying millions of barrels of oil to Gulf refineries is hurtling full steam ahead through the Obama administration's block of the Keystone pipeline.

The amount of oil Canadian Pacific Railways carries from the Bakken Formation down through the heartland has surged 2,500 percent since 2009, to 8.5 million barrels per year from just 325,000. The company expects to move 45 million barrels per year within the decade.

“We are responding to a growing demand,” Ed Greenberg, a spokesman for Canadian Pacific told FoxNews.com. “There has been unprecedented growth in the energy industry.”



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The Calgary-based railroad is one of two that carries oil down from Canada's tar sands, but Canadian Pacific also carries thousands of barrels per day to the Gulf from North Dakota's booming Bakken Formation oil fields.

Experts estimate shipping by rail instead of pipeline adds anywhere from $5 to $10 to the price of a barrel, not to mention the high-capacity, 24-7 flow a pipeline affords. Rep. Fred Upton, (R-Mich.), chairman of the House Energy and Commerce Committee, says the explosive growth of oil delivery by rail underscores the missed opportunity of the Keystone XL Pipeline, a Canada-to-Texas oil pipeline that became bogged down by environmental concerns and was ultimately tabled by the Obama administration and the Democrat-controlled Senate.

"We need to be doing all we can to develop our resources, particularly now, with rising gasoline prices and the threat of supply disruptions overseas," Upton told FoxNews.com. "Most observers acknowledge that rail transport is the best option we currently have to get this oil down to the refineries -- but the Keystone XL pipeline presents us with a better alternative."

Supporters of the pipeline, which the Obama administration plans to consider again after the 2012 election, say it would not only lower the price of a barrel of oil, but that it would also provide jobs. TransCanada, the company seeking to build the pipeline, has estimated it would generate 130,000 jobs, a number endorsed by Republican supporters of the pipeline. But Democrats cite a study by Cornell University that places the number at just 5,000 jobs.

With the pipeline in limbo, trains are the next-best way to move the oil south to the thirsty refineries on the Texas and Louisiana coasts, Michael Ervin, a petroleum industry analyst based in Calgary, Alberta, Canada, told FoxNews.com.

“The use of rail as a short-term solution to pipeline capacity limitations was a likely approach either with or without the additional production,” Ervin said. “It is more a matter of a lack of pipeline capacity, which in turn is depressing domestic crude oil prices of all types in the Midwest and Canada as well.”

Oil companies are investing their own money in the older mode of transport, said Tony Hatch, a New York-based transportation and railroad industry analyst, noting that Hess Oil is among the latest companies to buy its own rail tankers. He said even if the pipeline ultimately gets built, rail transport will be a piece of the puzzle.

“The markets are ready for the oil now," said Tony Hatch, a New York-based transportation and railroad industry analyst. "It’s clear that they are investing in rail even when and if a pipeline is built."


Read more: http://www.foxnews.com/politics/2012/03/20/trains-roll-from-north-to-fill-void-left-by-failed-keystone-pipeline/?test=latestnews#ixzz1plPkYaUl
 

Tam

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Oil Pipeline Debate Needs Perspective

Data paint different picture

Opposition to proposed Alberta-based oil and gas projects is really a proxy war against Canada’s oil sands resources. Despite the miniscule role oil sands contribute to global CO2 emissions, they are an easy target for environmentalists.

Opponents have scored a victory of sorts with recent news that the U.S. State Department will delay project approval until at least 2013.

Protests outside the White House involving celebrities and Nobel prize laureates (with no expertise in relevant fields) have galvanized opposition. Environmentalists oppose the Keystone XL and the Northern Gateway projects, and in Northern Gateway’s case, First Nation communities vowed to obstruct pipelines crossing traditional territories. Opponents in Nebraska are concerned Keystone will run through the Ogallala Aquifer, where state residents draw their drinking water.

Enbridge’s Northern Gateway project would construct two pipelines running from Bruderheim, Alberta, to Kitimat, British Columbia. The eastbound pipeline would import natural gas condensate and the westbound pipeline would export crude oil. The project also includes a proposed new marine terminal in Kitimat.

Keystone XL consists of a 2736-kilometer (1,700-mile) crude oil pipeline and related facilities that would transport oil from a supply hub in Alberta to delivery points in Oklahoma and then on to the U.S. Gulf Coast. It would transport up to 830,000 barrels per day.

The U.S. State Department recently released its environmental assessment of the Keystone XL pipeline and concludes that it will have minimal effects on the environment, including greenhouse gas emissions.

But opponents did not let facts interfere with the cause.

Their opposition is fuelled by the few oil leaks that do occur, such as the very unfortunate oil spill from Canadian-owned Enbridge into a southern Michigan river in the summer of 2010.

Oil sands opponents use fear surrounding catastrophic oil and gas spills or leaks to advance their claims.

Such threat is real but small, and is dwarfed by risks that modes of transportation like rail pose. Given recent expressions of interest from Canadian Pacific over opportunities in transporting oil and gas and given pipeline construction delays, this is not a theoretical issue.

When it comes to frequency of accidents, data from the Transportation Safety Board of Canada – the government agency responsible for federally-regulated oil and gas pipelines as well as railways – reveals an interesting picture. Regarding annual frequency of accidents, pipelines are safer. These data does not cover provincially-regulated railways or pipelines. To provide an apple-to-apples comparison, the data focus on pipeline versus railway accidents that involve leaks or involve dangerous goods.

In terms of ‘Reportable Pipeline Accidents’ as opposed to ‘Reportable Railway Accident’, pipelines come out on top. For pipelines, it means an accident that sustains damage affecting the safe operation of the pipeline, causes or sustains an explosion or a fire or ignition that is not associated with normal operating circumstances, or sustains damage resulting in a leak.

In contrast, ‘Reportable Railways Accidents’ refer to accidents resulting directly from the operation of rolling stock (rolling stock comprises all of the vehicles that move on a railway), where the rolling stock is involved in a collision or derailment and is carrying dangerous goods or is known to have last contained residue from dangerous goods that has not been purged.

In 2010, there were 141 rail accidents involving dangerous goods, but there was only one pipeline accident.In 2009, there were 133 rail accidents involving dangerous goods, but only six for pipelines. In 2008, there were no reported pipeline accidents. In 2007, there were two accidents and just one in 2006.

Unfortunately, Transportation Safety Board reporting does not include discharge data, making it difficult to know or evaluate proportions.

It is worth noting the last fatal pipeline accident in the portion of the industry under federal jurisdiction occurred in 1988, and the last accident involving serious injury occurred in 2006.

What is important is the toxicity of the discharge would be the same if the product was transported by rail or pipeline and that pipeline incidents are much less frequent.

Any accidents or incidents involving release of any substance is of concern and needs to be dealt with, but they need to be put into perspective. Even more so given thatthe alternative is transporting to other oil markets mainly via tankers to China and Japan which carry their own safety risks. Stronger measures are needed to prevent accidents and minimize damage, but it is impossible to make all risk disappear.

The important thing is to realize that energy needs must be met from somewhere. Different sources and means of transportation must be assessed against each other. At this time, pipeline is actually one the safest and efficient means available to us.
 

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