Is the Keystone kibosh coming?
According to rumour, President Obama is expected to issue the death knell for the Keystone XL pipeline before or during the Labour Day weekend. The irony is somewhat rich, given that Labour Day is ostensibly when both Canadians and Americans celebrate the working men and women who keep the machinery of society functioning—the exact same people who would be harmed if Mr. Obama kills Keystone.
Setting aside the issue of job losses (and estimates vary considerably to be sure), the termination of Keystone will also accelerate the movement of still more oil by rail. Seven years of stalling Keystone has contributed to a dramatic increase in the amount of oil being shipped by rail. According to the EIA, over the last five years, annual exports of oil from Canada to the United States have increased from 42 thousand barrels in 2010 to just under 42 million barrels in 2014.
And though the current low oil prices might slow things down a bit, the long-term trend is expected to continue. The Canadian Association of Petroleum Producers projects that in the absence of more pipeline infrastructure, shipments of Canadian crude could increase from about 185,000 barrels per day in 2014 to between 500,000 and 600,000 barrels per day in 2018. Why is this a problem? Because although both pipeline and rail have excellent safety records (and we do need all transport modes to satisfy predicted continental and global demand), there’s no getting around the fact that rail is a more risky way to transport hydrocarbons compared to pipelines.
We recently used data from two Canadian regulators, the Transportation Safety Board and Transport Canada, to develop a head-to-head comparison of risks when moving oil and gas by pipeline, or moving the same quantity by rail. The study found that in every year from 2003 to 2013, pipelines had fewer releases per million barrels of oil equivalents transported. Overall, rail was found to be just over 4.5 more likely to have an occurrence when transporting oil and gas compared to pipelines. The evidence from Canada is clear. Pipelines are the safer way to transport oil and gas.
Evidence from the United States is equally clear. An analysis conducted by Diana Furchtgott-Roth of the Manhattan Institute compared the safety of transporting oil and gas by pipelines, rail and road. Her analysis found that transporting oil and gas by road and rail resulted in higher incident rates per billion ton-miles of product transported compared to pipelines. In addition, road and rail incidents were associated with higher rates of fatalities and hospitalizations compared to pipelines. Overall, her analysis concluded that pipelines were the best way to ensure oil and gas arrives safely at its destination.
If that’s not sufficient, the president’s own State Department came to similar conclusions in their review of Keystone XL. They concluded rail has a higher number of releases per ton-mile compared to pipelines, and although pipelines release larger volumes per ton-mile, this could by somewhat offset by the increased likelihood of spills if the oil moved by rail.
More importantly, State found that moving the 830,000 barrels per day intended for Keystone by rail instead would potentially lead to an additional 49 injuries and six fatalities on a yearly basis.
As we approach the Labour Day weekend, President Obama should give consideration to the very workers being celebrated, who will be denied some employment, while being exposed to higher levels of risk, as will both the American and Canadian environments. Despite current low oil prices, the oil from Alberta’s oilsands is expected to make its way to market, Keystone XL or not. That may be via expanded East/West pipeline capacity within Canada and shipment via tankers to countries overseas, or it may be through expansion of existing pipeline capacity mixed with increased rail transport to the United States.
Research from both countries shows that the most rational way to transport bulk hydrocarbons—the stuff that our society literally runs on—is by pipeline, rather than rail. As many have observed, Canada’s oilsands constitute a trivial contributor to climate change.
The question for Mr. Obama and his environmental friends this Labour Day then is, why do you want to increase environmental risk and risks to workers for no demonstrable environmental benefit? For that’s surely what you will do by putting the kibosh on Keystone XL.
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