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CALGARY — Russ Girling is prepared to accept that he is, for now, losing.
Pipelines built by companies such as Mr. Girling’s TransCanada Corp. carry the vast majority of the crude oil shipped around North America. This year, however, nearly 10 per cent of the volume of oil pulled from the ground in the U.S. will not flow through that massive network of buried steel. It will instead be loaded on to trains and race across the continent in a blur of tanker cars that is transforming the way North America’s energy moves.
It is a giddy procession of profit, as trains connect western oil wells to coastal and global markets willing to pay far more for crude than the inland buyers attached to the continent’s pipeline system.
It’s also a procession of risk. Though accidents remain infrequent, trains leak hazardous materials more frequently than pipelines, have a higher accidental death rate and produce greater emissions. But they are succeeding where pipelines are stumbling.
Across North America, planned pipelines are running into an outpouring of public discontent largely around environmental concerns, allowing locomotives to increasingly step in as an alternative. In 2008, fewer than 20,000 barrels a day of crude oil moved on trains in the U.S. By the end of 2012, that number had jumped above 500,000 – a more than 25-fold increase in five years.
Meanwhile, projects such as TransCanada’s Keystone XL pipeline, which would carry 830,000 barrels a day to the U.S. Gulf Coast, languish even as existing pipelines out of Canada are stuffed to capacity.
“Short term, the critics are slowing pipeline development. There’s no question,” Mr. Girling said in a recent interview.
But as he contemplates all of those trains moving barrels that could be flowing in TransCanada steel, he is struck by a rich irony. If pipelines are being stopped on environmental grounds, the result has in some ways been the exact opposite.
“By denial of the pipeline, safety risk increases. Potential environmental risk increases. Greenhouse gases increase,” Mr. Girling says. He adds: “So I’d call it a Pyrrhic victory, where they’ve slowed down, potentially, the development of the Canadian oil sands for a short period of time – until alternatives are found. But in the short run, they haven’t achieved any of these safety or environmental objectives.”
Trains have long been bearers of coal, wheat, lumber and a host of consumer goods. They are, for many commodities, blessed with numerous advantages. They move with relative speed. They are far more economical than trucks. They travel across routes created decades and centuries ago, along rights-of-way imbued with all manner of legal rights, a lengthy history that gives them the power to be particularly agile.
For the rest of this article, please go to the Globe and Mail website: http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/with-pipelines-under-attack-railways-lead-race-to-move-oil/article7264773/?page=all