Canadian Railroads > Pipelines a tough sell in a post Lac-Megantic world

The National Post has an article about the increasingly difficult environment for building new oil transport capacity in Canada. Pipelines are and will be subject to more scrutiny, and there's no sign that Quebec will back down from its hard line against any new pipeline expansion of capacity.

The article is a pretty good overview of the political reality that Quebec will likely have to allow some pipeline access, likely the reversal of the natural gas pipe or suffer closings of refineries and additional increases in gasoline prices. For the short run, that could be a plus for railroads carrying crude from the US and western Canada.


http://business.financialpost.com/2013/08/24/pipelines-a-hard-sell-in-quebecs-post-lac-megantic-world/?__lsa=9232-e1d0

Omnitrax has been working to expand the export of petroleum products through the Port of Churchill on Hudson's Bay, but the condition of the line, built on muskeg, while improved in recent years, is drawing a new scrutiny in the wake of the Lac Megantic tragedy.

Ray

Ah!!! As the whole world is discovering....the price to relieve the dependence on foreign oil is a steep one!

rev66vette Wrote:
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> Ah!!! As the whole world is discovering....the
> price to relieve the dependence on foreign oil is
> a steep one!

Adequate infrastructure is never cheap, inadequate infrastructure is far far more expensive.

Look at the money we have spent on wind and solar, forgetting that the wind is fickle and night follows day. Yet the true believers keep say if only we spent more money.......

One can also look at the cost to stay dependent on foreign oil. the cost to maintain open seas, entanglements with foreign problems, the list goes on.

Now not every possible solution is a good idea, exporting oil via Churchill seems like a real long stretch. Is the port even open year round? If that in the end is the only option then the massive cost will be because of political choices not economic choices.

trainman630 Wrote:
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>(snip)
>
> Now not every possible solution is a good idea,
> exporting oil via Churchill seems like a real long
> stretch. Is the port even open year round? If
> that in the end is the only option then the
> massive cost will be because of political choices
> not economic choices.


From what I've read about the Churchill project, tanker access would be possible about 7-8 months a year. The idea originally gained traction as a way to bypass the perceived intransigence of the British Columbians to more oil moving across the province. There are gas and oil plans, but there's a lot of opposition.

I suspect the interim answer will be more oil moving by rail, and being exported from US west coast ports.

But there are those who will conveniently dismiss the railroads as the only true way to ship this commodity to the refineries. It's a delicate balance that politicians must walk whether it's here or our neighbors north of the border. However sensational the Lac Megantic wreck was, it was human error that caused it. The need to transport this product has to be emphasized as much as the warnings to the shippers that incidents such as Lac Megantic will not be tolerated. Pipelines too, have a wealth of problems on their own. Refineries prefer rail rather than pipelines. To utilize a pipeline, refineries have to sign long term contracts that have specific minimums. To control inventory, the pipeline has to almost be perpetually filled. Not an easy thing. Pipelines can only handle one grade at a time. Even if the refinery has to purchase tank cars, it's a cheaper option than a pipe-line. Tank cars are a virtual storage bin for the product. This basically has eliminated large storage tanks that had previously been associated with refineries. Tank cars can handle various weights and varieties of crude. Deliveries are easy to schedule with tank cars.

Reading the comments below that linked article can give one a good feel for the political situation in Canada and especially in Quebec....I find it incredibly interesting how this tragedy in Lac Megantic is being played out as a political free-for-all. Not that it couldn't happen here in the US, but it does show the enormous pressure being placed on the leaders there to resolve a very delicate issue.

rev66vette Wrote:
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> Pipelines
> too, have a wealth of problems on their own.
> Refineries prefer rail rather than pipelines.

To me it's a matter is not so much as human error is said to have caused the tragic Lac-Megantic situation but of the potential for future failures.

A pipeline can be built to avoid the most heavily populated areas and in a way that's easily technically monitored.

On the other hand, rail routes face a host of potential problems such as seemingly countless unprotected grade crossings and the financial impossibility of real time monitoring of track conditions, etc.

I would like to see research into the safety records of both from the last 15 years or so before we go with either one, both, or none.

trainman630 Wrote:
-
>
> Look at the money we have spent on wind and solar,
> forgetting that the wind is fickle and night
> follows day. Yet the true believers keep say if
> only we spent more money.......
>
>
>There's a plan to install giant light towers at solar facilities so they will operate 24/7

DonNadeau Wrote:
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>(snip)
>
> I would like to see research into the safety
> records of both from the last 15 years or so
> before we go with either one, both, or none.


I don't know about Canada, but the US pipeline safety administration has extensive reports about the safety of moving oil and other haz-mat by pipe and rail. Even with the extremely low reporting threshold, safety still exceeds 99.99% for both. For the pipes, I believe it goes out to five 9s to the right of the decimal point.

Not perfect, but as close as you're going to get in this world.

I'm going out right now, but if nobody posts in the meantime, I'll look for the links tonight.

DonNadeau Wrote:
-------------------------------------------------------
> rev66vette Wrote:
> --------------------------------------------------
> -----
> > Pipelines
> > too, have a wealth of problems on their own.
> > Refineries prefer rail rather than pipelines.
>
> To me it's a matter is not so much as human error
> is said to have caused the tragic Lac-Megantic
> situation but of the potential for future
> failures.
>
> A pipeline can be built to avoid the most heavily
> populated areas and in a way that's easily
> technically monitored.
>
> On the other hand, rail routes face a host of
> potential problems such as seemingly countless
> unprotected grade crossings and the financial
> impossibility of real time monitoring of track
> conditions, etc.
>
> I would like to see research into the safety
> records of both from the last 15 years or so
> before we go with either one, both, or none.

Seems to me that you are looking for a lot of "absolutes". And why not? Because this is the culture today in the politically correct world in which we live. I too would love to ascribe to the fact that there will be no more plane crashes, no more train derailments, no more automobile accidents. Unfortunately, there are no guarantees in our world. Tragedies occur constantly, and they can be caused by human error, natural disasters, etc. Boats sink, planes crash, trains derail, pipes can leak, bridges can collapse, hurricanes can destroy, on and on. These are things we have to cope with, I live in the New York metropolitan area and just about every one of these events have occurred in my immediate area. We have airports, high speed rail, interstates, refineries, (Bayway one of the largest in the US is nearby). It's a slippery-slope for sure, but the fact remains that we have to move on from these tragedies. That was a terrible tragedy that occurred in Lac Megantic, and the sympathies of everyone in both countries is with the people there, but the fact remains that we all must move on.

@ Lackawanna484 Thank you. That's really helpful information.

@ rev66vette

rev66vette Wrote:
> Seems to me that you are looking for a lot of
> "absolutes". And why not? Because this is the
> culture today in the politically correct world in
> which we live.

Actually, I am an almost utter failure at being politically correct. Because you do not know me, it would be unfair to complain about the way that you depicted me.

My comments were motivated by the Lac-Magnetic situation being used as an argument to block both 1) Alberta oil reaching the port of Prince Rupert or Point Roberts in British Columbia by pipeline and 2) the Keystone pipeline expansion. Because it seemed logical that pipelines should be safer for the reasons I mentioned, I was concerned that those who opposed these pipelines were actually making us less safe. However based on Lackawanna484 information, the success of their opposition will merely make us pay more.

I was not totally depicting "you" per se', and I'm sorry you took it that way. In second guessing myself at this time, I would have been better off making that lead-in sentence to read that " a lot of people are looking for absolutes", rather than "you"....I happen to agree with your assessment that the impact of pipelines will have on us, as well as the cost as based on my early remark of how we're finding out how much the cost is of "relieving ourselves of the dependence on foreign oil". No doubt the regulatory impact of the Lac Megantic tragedy will trickle down to us at the pump.

@ rev66vette

I tend to overreact and am sorry for that. Thank you for your comments.

No problem..I tend to get lost in the threads, once they go on for a while.....

Check the stats on the safety of pipelines vs. rail transport, be ready for a surprise. it is to the advantage to both our countries to make ourselves energy independent so we can just tell the middle east to keep killing each other or whatever those whack jobs over there want to do. (and no I don't think the whole of the middle east is a bunch of whack jobs but the reasonable people over there seem to be content to let the whack jobs for the most part call the shots). And we in the sane part of the world will be free to go on with our lives.

mmm1000 Wrote:
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> Check the stats on the safety of pipelines vs.
> rail transport, be ready for a surprise. it is to
> the advantage to both our countries to make
> ourselves energy independent so we can just tell
> the middle east to keep killing each other or
> whatever those whack jobs over there want to do.
> (and no I don't think the whole of the middle east
> is a bunch of whack jobs but the reasonable people
> over there seem to be content to let the whack
> jobs for the most part call the shots). And we in
> the sane part of the world will be free to go on
> with our lives.

That's true as far as it goes, but some of the "trouble makers" have the nasty habit of blowing up Air India jetliners filled with Canadians, attacking the Pentagon with 767s, murdering Christians in Iraq, Syria, Egypt, etc. And then they kill each other.

No reason why they wouldn't attack US and Canadian railroads, pipelines, etc if some nut job told them it was God's will.