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Canada Mulls Shipping Huge Amounts of Tar Sands Oil via Rail

Proposal prompted by China's request for alternatives in the face of rising opposition to Keystone XL and Northern Gateway pipelines

There’s yet another sign that Canadian pipeline transport company Enbridge's plan for the Northern Gateway pipeline, that would move heavy crude from Alberta’s tar sands mines to a marine shipping terminal in British Columbia, is dead in the water. A recent report by Greenpeace has revealed that the Canadian government and the privately-owned, CN Rail, are looking into the possibility of transporting tar sands bitumen from Alberta to the Canadian west coast, via rail, from where it could be shipped to markets across the Pacific Ocean.

Santa Rita MountainsPhoto by Steven TomsicShipping bitumen by rail would not require added chemicals to dilute the heavy, viscous crude for ease of transport, but railways too, carry all the same environmental risks from spills. As the July tragedy in Quebec that killed 47 people shows, the combination of derailment and the transportation of flammable materials can be devastating.

Greenpeace has obtained number of internal memos by Natural Resources Canada (the country’s natural resources department) that reveal that CN Rail is considering this proposal at the behest of the Chinese stated-owned oil and gas company, Nexen Inc.

"Nexen Inc. is reportedly working with CN to examine the transportation of crude oil on CN's railway to Prince Rupert, B.C., to be loaded onto tankers for export to Asia," states one of the memos. Another memo notes that CN Rail has the capacity to move seven trains, each carrying 100 carloads of bitumen to BC every day, a volume that matches the capacity of the controversial Northern Gateway pipeline.

A briefing note for a March 1, 2013 meeting between Natural Resources Canada deputy minister Michael Keenan and CN Rail assistant vice president David Miller, makes a direct reference to Northern Gateway. "Rail cars can typically carry between 550 and 680 barrels, depending on the product, tank car and track. Each train can carry about 55,000 barrels. Therefore, to transport 550,000 barrels of oil per day (e.g., an amount similar to the proposed Northern Gateway pipeline project) would require operating 10 trains of 100 cars every day — about one train coming and going every hour. The maximum amount of crude oil that could be transported by rail for export will also depend on the railways requirements to move other products to export, as well as the capacity of any proposed oil handling facilities at the port."

The move to ship crude via freight trains is part of a larger trend of transporting petroleum products by rail because of a lack of pipeline capacity. According to the Institute for Energy Research, shipments of oil via railways almost doubled in 2012. In a similar finding by the US Energy Information Administration, 356,000 carloads of crude oil and refined petroleum products were shipped by rail in the first half of 2013 — a 48 percent increase from the previous year.

Canadian Ambassador Gary Doer recently explained to The Globe and Mail that if the Keystone XL pipeline is voted down, it will result in an increase in rail transport of petroleum products from Canada to the United States, which will not require President Barack Obama's approval. President Obama is not expected to make his decision on Keystone XL — which would to transport crude oil from Alberta across the US to refineries in the Gulf Coast — until the end of this year.

Unlike an oil pipeline, shipping bitumen by rail would not require added chemicals to dilute the heavy, viscous crude for ease of transport. And oil pipeline spills are three times larger than comparable rail spills. However, railways too, carry all the same environmental risks from spills including damage to ecosystems and, as evidenced by the July tragedy in Lac-Mégantic, Quebec, the combination of derailment and the transportation of flammable materials can be devastating.

On July 6 this year, 47 people died in the small Quebec town after a train carrying crude oil derailed, caught fire, and exploded. The accident — that also resulted in about 1.5 million gallons of oil either burning or leaking into the ground, and a fire that burned for four days — was the deadliest rail tragedy in Canada in over a century.

"Safety rules haven't kept up with the rapid expansion of oil being moved by rail," says Keith Stewart, Greenpeace Canada’s climate and energy campaign coordinator. Rail cars are prone to spill upon derailment, he says, citing multiple reports from the Transportation Safety Board of Canada dating back to 1994. "When things derail they spill easily and with a derailment that is metal on metal as it is by rail, there are a lot of sparks," Stewart explains. "Sparks combined with a flammable substance is a recipe for a disaster."

Stewart is concerned that CN Rail is proposing running all the crude-carrying trains on existing rail lines. That means that unless the company makes any infrastructure upgrades, its plan move such enormous volumes of flammable cured could skirt the need for an environmental assessment and the public debate that comes with it, he says.

"It is a way to do an end run around the opposition to Northern Gateway," Stewart says. "We want to force the government to have a discussion in the public sphere not just behind closed doors."

For its part, the government, especially the Natural Resources Minister Joe Oliver, has always been upfront about Canada’s desire to push Alberta tar sands oil to any and every available market. In the days following the release of documents by Greenpeace, the government publicly supported the rail pipeline scheme.

Ron Johnson
Is based in Toronto, Canada, where he is an editor for Post City magazines and contributes to The Globe and Mail, Maclean’s, The National Post and the London Business Times.

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