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Canadian Oil Moves to Rail as Keystone Battle Continues

Increased investment comes after July derailment of train carrying crude oil

• October 31, 2013 10:11 am

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As environmentalists continue to battle the Keystone pipeline, Canadian oil companies are investing more in rail transportation as an alternative, the New York Times reported on Thursday.

A July derailment of a freight train carrying crude oil raised concerns about the dangers of rail transportation. Companies and the Canadian government say they are determined to get their oil to market, whether by pipeline or less safe means.

President Barack Obama and his State Department have repeatedly delayed a decision on approving the Keystone pipeline. Even if it is rejected, Canadian tar sands crude, which the pipeline would transport, will be carried to refineries and export terminals by other means.

Since July, plans have been announced for three large loading terminals in western Canada with the combined capacity of 350,000 barrels a day — equivalent to roughly 40 percent of the capacity of the proposed Keystone XL pipeline that is designed to bring oil from western Alberta to refineries along the Gulf Coast.

Over all, Canada is poised to quadruple its rail-loading capacity over the next few years to as much as 900,000 barrels a day, up from 180,000 today.

That increase comes even in the wake of a disastrous accident involving a Canadian train carrying crude oil.

Last month, a Canadian National Railway Company train carrying lubricating oil, ethanol and natural gas liquids between Winnipeg and Edmonton derailed in Saskatchewan, leading to a leak on farmland and well-publicized comments by Saskatchewan’s premier, Brad Wall, that the accident underscored the need for more pipelines to safely move petroleum products.

Perhaps recognizing these facts, some on the left have spoken out against environmentalists’ focus on Keystone. New York Magazine’s Jonathan Chait recently called the fight "a huge environmentalist mistake."

"To an increasingly disillusioned environmental movement," environmental activist Bill McKibben writes in the Huffington Post, "Keystone looks like a last chance." It may be a last chance for the movement McKibben has helped lead — he has spent several years organizing activists to single-mindedly fight against approval of the Keystone pipeline — but Keystone is at best marginally relevant to the cause of stopping global warming. The whole crusade increasingly looks like a bizarre misallocation of political attention.

Published under: Keystone, Oil