Train delayed again? Blame the oil boom.
| Washington
If you鈥檙e stuck at a railroad crossing or , you might blame it on the US oil boom.
US oil production is the highest in decades, and more and more crude is traveling by train. That is slowing shipments of grains, gravel, and even coal, as commodities and a resurgent oil industry compete for a finite amount of US rail. More oil pipelines could help ease the freight bottleneck, but those take time to build and have become controversial topics in the debate over the future of US energy.
In the meantime, firms are taking to the rails to get the country鈥檚 newfound oil wealth to market.
鈥淥il just tends to be more valuable than other products,鈥� says Adie Tomer, a senior research associate in the Metropolitan Policy Program at the Brookings Institution, a Washington-based think tank. 鈥淎s more and more oil comes online, the freight companies want to ship more.鈥�
Today, rail carries more than 11 percent of US oil. That鈥檚 a huge jump from five years ago, when trains transported less than 1 percent of domestic oil, according to a March by the Center for Strategic and International Studies (CSIS), a Washington-based think tank.
The glut of oil trains is even , with sparse coal shipments creating headaches for utilities in Wisconsin and Minnesota. In North Dakota, and other crops. And the stakes are high: North Dakota growers could lose $160 million if they are unable to ship grains via rail and must instead sell locally at a reduced price, according to a North Dakota State University study.
鈥淭his rail backlog is a national problem,鈥� Sen. Heidi Heitkamp (D) of North Dakota the New York Times. 鈥淭he inability of farmers to get these grains to market is not only a problem for agriculture, but for companies that produce cereals, breads and other goods.鈥�
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So how to alleviate the rail bottleneck? Pipelines are the obvious answer, but concerns over climate change and carbon emissions have made long-term investments like the Keystone XL pipeline controversial flash-points. Environmentalists and green groups contend that in a post-carbon economy, and will encourage risky oil development in the meantime.
For his part, President Obama has said he will only approve the Keystone XL pipeline 鈥� which would help alleviate the Bakken bottleneck 鈥� if it does not 鈥�significantly exacerbate the problem of carbon pollution.鈥� That pledge ties pipeline construction to strategic decisions on climate issues, and not to market forces.
Demand for oil in the global marketplace isn鈥檛 slackening, though, even if there is political will to veer away from carbon-intensive fossil fuels. With pipelines a far-off and uncertain solution, rail is a convenient stop-gap.
Rail is especially necessary for oil shipments in regions lacking in pipeline capacity, like North Dakota. There, 60 percent of the oil leaves via rail, en route to refineries in other states.
鈥淭hat鈥檚 why Keystone XL is such a big deal 鈥� there鈥檚 no pipeline in that region. Rail is the only way to get that oil out,鈥� Mr. Tomer says in a telephone interview Tuesday.
High-profile catastrophes like the deadly Lac-Megantic rail explosion in Quebec last year have raised concerns about the safety of rail. In July, the Department of Transportation proposed new safety rules in an effort to improve the safety of transporting crude oil by rail. But as CSIS鈥檚 on rail safety demonstrated, rail is accident-free more than 99 percent of the time.
With increased traffic comes increased risk, though 鈥� especially with train cars hauling flammable 听crude. 鈥淎s you use more of the capacity in the system, you're more prone to accidents 鈥� and with oil on rail, those can become disasters,鈥� Tomer says.
In contrast, pipelines tend to reroute around areas of heavy population, according to Tomer, and are dramatically safer and more efficient.
The drawback? Pipelines aren鈥檛 built in a day. Whereas rail has some ability to expand and contract to meet the demand of oil shipments, pipelines lack that flexibility.
