Fraser Forum

Pipelines are safer, cheaper and greener

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New tank cars are coming for the oil by rail industry. The DOT-111s, which have been at the centre of fiery derailments in Ontario this year and were present in the Lac-Mégantic tragedy, are being phased out with new regulations.

These regulations require new TC-117 cars to replace certain DOT-111s by May 2017, and as of October 1, 2017, all new tank cars must be built to the new standard. The law further requires that within 10 years, all cars travelling within Canada must meet the new standard.

The new regulations also include requirements for operational protocols pertaining to routing, speed limits, and more communication with local governments about flammable liquids being transported. The industry is also taking additional measures to make the products that are being transported less volatile.

While we don’t yet know whether these new regulations will lead to safer cars and fewer accidents (which is what we hope, but as we have noted before many rail accidents are caused by human error, something more regulations may be hard pressed to deal with), we do have a sense of what the costs will be. According to a report from the Brattle Group, when factoring in the cost of modifying tank cars, the time that cars will be out of service, premature retirement of tank cars, and increased costs to shippers, the new regulations are expected to cost more than $60 billion for full implementation.

But if safety is really our number one concern, then the best option is to just build pipelines rather than tinkering with regulations governing the oil by rail industry.

Our recent analysis of pipeline vs. rail safety in the transportation of oil and gas found that rail is more than 4.5 times more likely to experience an occurrence when compared to pipelines. Another analysis found that transportation of oil and gas by rail is associated with more injuries, and in a similar vein the State Department found that if you were to transport the 830,000 barrels per day intended for Keystone XL by rail, this could potentially lead to an additional 49 injuries and six fatalities per year.

The State Department also found that moving all the oil intended for Keystone XL by other means could result in GHG emissions that are more than 40 per cent higher than if the oil had been moved by pipeline. In terms of costs as well, pipelines have the advantage—shipping oil by rail can be up to three times more expensive. That’s money, that could be invested in other initiatives, being washed away by a lack of pipeline infrastructure.

While politicians like Hillary Clinton and Rachel Notley find it politically useful to oppose pipelines, they do no favour to either workers or the environment. 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, while freeing up money that can be reinvested, then the answer is simple: build pipelines.

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