Keystone delay means oil will continue flowing south by rail, which is less safe than pipelines
TransCanada, the company behind the Keystone XL pipeline, which would funnel Alberta oilsands crude across the United States to Gulf Coast refineries, made headlines this week when it asked the U.S. State Department to suspend its permit application, citing the current review of the pipeline’s route through Nebraska.
This move by TransCanada, which has been seeking regulatory approval for more than seven years, comes as some observers speculate that a decision to reject the pipeline was coming as soon as this week. Some have also speculated that by asking State to suspend the permit application, TransCanada hopes to push any decision on the pipeline past the 2016 U.S. election when a new president may approve the project.
It’s difficult to speculate on TransCanada’s motives for requesting a delay, but one thing is clear: as new pipeline infrastructure continues to be delayed, oil will likely continue moving by rail.
Consider that over the last five years, annual exports of oil from Canada to the U.S. increased from 16 thousand barrels in 2010 to more than 51 million barrels in 2014. And even though this trend may see reductions due to the downturn in oil prices, large amounts of oil will continue flowing to the U.S. by rail in the absence of new pipelines.
Unfortunately for Canadians and Americans, although moving oil by rail is generally safe, it’s not the safest way to transport oil and gas. Pipelines are.
In a recent study, we compared the safety of pipelines and rail for moving oil and gas, taking into consideration the amount of product each transportation method uses. According to the study, rail is more than 4.5 times more likely to experience an occurrence (accidents or incidents) when compared to pipelines.
Moreover, transporting oil and gas by rail has also been associated with higher rates of fatalities and hospitalizations compared to pipelines.
While pipeline projects continue to be delayed, the data is clear: if you want oil and gas transported in the safest manner possible, having as small of an environmental impact as possible, then the answer is simple. Build pipelines.
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