July 9 (Bloomberg) -- A growing number of North American communities are exposed to risks of derailments and spills from trains carrying crude oil as rising production increases rail shipments across the continent and pipelines such as TransCanada Corp.’s Keystone XL are delayed.
More than 70 runaway tank cars filled with thousands of barrels of crude derailed and exploded in Lac-Megantic, Quebec, July 6, killing at least 13 people and incinerating 30 buildings in the town. About 35 people remain missing. The disaster intensified the debate over the safety of transporting oil by train compared to pipelines, which have their own record of spills.
Shipments of oil by rail increased 17 times faster than crude production in the U.S. last year as producers use existing track to ship rising volumes from new shale fields and oil sands to market, according to figures compiled by Bloomberg. North American railroads pass through more populated areas than pipelines because many cities were built around the tracks, Brigham McCown, a transportation consultant, said.
“What makes it scarier for the average person is that it’s a moving train with crude oil that can explode,” Mike Paul, a public relations consultant who runs MGP & Associates PR in New York, said in a phone interview yesterday.
Investigators yesterday began testing water supplies after about 26,385 gallons (628 barrels) of crude spilled into the Chaudiere River from the Montreal, Maine & Atlantic Railway Ltd. train that derailed and exploded. The carrier is owned by the closely held Rail World Inc. of Chicago.
The train was carrying crude to Irving Oil Corp.’s 298,800-barrel-a-day Saint John refinery in New Brunswick, according to a statement on Irving’s website. The refinery is receiving more than 90,000 barrels a day by rail, a person familiar with the plans said in December.
The Quebec disaster comes as construction of pipelines such as the $5.3 billion Keystone XL conduit to the Gulf Coast are delayed by environmental and regulatory concerns. TransCanada applied to build Keystone XL five years ago and is awaiting a U.S. decision on a revised route after the Obama administration initially rejected the project in January 2012.
Pipelines have seen increasing opposition on safety concerns after a series of spills in the past three years, such as the 5,000 barrels leaked in March by Exxon Mobil Corp.’s Pegasus line in Arkansas, and the 2010 rupture of an Enbridge Inc. line in Marshall, Michigan. Enbridge spilled more than 20,000 barrels of heavy oil from Canada into a branch of the Kalamazoo River.
Communities new to oil development, including in North Dakota and Utah, are seeing rising rail shipments of crude due to a scarcity of pipelines. Trains are passing through more populated areas as the footprint of crude-by-rail expands.
Capacity to offload oil from rail cars at refineries will expand by 840,000 barrels a day in 2014 compared to last year in U.S. communities including Albany, New York; Delaware City, Delaware; Yorktown, Virginia, and Philadelphia, according to the Atlantica Centre for Energy, an energy industry association in Saint John.
The amount of crude delivered by rail in the U.S. increased 256 percent last year from 2011, according to the Washington-based Association of American Railroads. That compared with an increase of 15 percent in oil production, Energy Information Administration figures show.
As train shipments rise, so does the risk to communities in part because a higher proportion of railroads run through communities than pipelines, said the consultant McCown, who formerly led the U.S. Pipeline and Hazardous Materials Safety Administration.
“The feds and the industry need to educate all the local communities on what’s coming through,” McCown said in an interview from Dallas.
Railways suffer spills 2.7 times more often than pipelines, according to the Association of American Railroads, though historically pipelines spill greater volumes of oil.
John Stoody, a spokesman for the Association of Oil Pipe Lines, declined to comment on the risks of spills in populated areas. Robert Grindrod, CEO of Montreal, Maine & Atlantic Railway, didn’t immediately return a phone message. The voicemail of Ed Burkhardt, chairman of the company, was not accepting new messages.
In the U.S., the rail industry and transportation regulators use a computer model to develop routes for oil shipments, considering factors including population density and the ability for communities to respond to accidents, Patti Reilly, a spokeswoman for the railroad group, said. Hazardous materials make up less than 1 percent of all rail shipments, she said.
Communities left out of the oil-route planning may not know the size and scope of potential fires and explosions, said Fred Millar, an environmentalist who has done research on rail safety for Friends of the Earth and other organizations.
“You’re not supposed to find out what your blast zone is by enduring one,” Millar said in a phone interview.
Calgary Mayor Naheed Nenshi criticized train operator Canadian Pacific Railway Ltd. and lamented his city’s lack of oversight of rail bridge inspections when five of the company’s rail cars carrying a petroleum product threatened to fall into Calgary’s Bow River last month after the bridge they were crossing buckled. Daorcey Le Bray, a spokesman for the mayor, said Nenshi declined additional comment yesterday.
Emergency responders helped remove the rail cars and the company determined one of the bridge’s supporting piers was damaged by surging river waters during record flooding in the region. Canadian Pacific’s rail line cuts through the heart of the downtown business district in Calgary, a city of 1.1 million people.
Ed Greenberg, a spokesman for Canadian Pacific, declined to answer questions about the company’s shipments of crude by rail through communities. In an e-mailed response, he deferred comment to the Railway Association of Canada.
“Our efforts at this time are focused on supporting all activities in place to help the affected population and the identification of the causes of the accident at Lac-Megantic,” the industry group said in a July 7 statement on its website.
Railroads have served as a “stopgap” to move oil while pipelines are built, said Garland Chow, an associate professor of operations and logistics at the University of British Columbia’s Sauder School of Business.
“Railroads never were a substitute for pipelines,” Chow said in an interview. “The volume of crude that is forecast to be shipped out of Alberta simply cannot be transported by rails.”
Trains carrying crude must manage a potentially higher risk of accidents, particularly when they travel over hills, according to railroad operations consultancy Railex Inc. Trains have historically moved mixed freight, a combination of car loads of liquid and non-liquid items such as coal, said Colon Fulk, a consultant with Railex in Sherrills Ford, North Carolina, who studies rail accidents.
Trains dedicated to hauling just one commodity such as oil must be handled differently than mixed cargoes, perhaps operating at lower speeds, Fulk said in a phone interview yesterday.
“The liquid will run to one end of the car and it will slosh to the front end of the car and that can cause in-train forces to be very different than your normal freight train,” Fulk said.
Both trains and pipelines deliver more than 99 percent of products without incident, according to the American Association of Railroads and the Association of Oil Pipe Lines.
Crude also isn’t the most dangerous substance to transport. An explosion of rail cars carrying chlorine would have created more toxic vapors than the fumes from the Lac-Megantic incident, Fulk said. As well, communities that have expanded on top of existing pipeline routes face the risk of leaks or explosions along the conduits.
The best way to mitigate the risk from increased oil shipments is for states and local communities to develop guidelines for what can be built near pipelines and railroads, an idea that was promoted in a 2010 report by the U.S. Transportation Department’s Office of Pipeline Safety. The federal government could help with education and by funding specific projects or beefing up emergency response, the consultant McCown said.
“You can’t move the rail line,” McCown said.
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