Energy East Concern: Rail vs Pipeline

In previous editions we’ve looked at pipeline spills, risk assessment and what kind of assurance we can expect from TransCanada. In this edition we’ll look at one of the key tactics being used to “railroad” (pardon the pun) the outcome for a pipeline.

Specifically, we need to look more closely into the rail vs pipeline argument being used to scare us into concluding that a pipeline is necessary to keep us safe. That’s because the rail vs pipeline issue is a “red herring”. It has never been one or the other, but the tragedy of Lac Megantic – significant, horrific and deadly – is being leveraged by Energy East.

Let me be clear: rail accidents do occur. Trains carrying oil do have accidents and spills, as do pipelines. The difference is that rail spills cause less damage while occurring more frequently, and pipeline spills are less frequent but cause much greater damage. Another truth: small spills are more easily contained and cleaned up. However, none of this is germane to the argument because it is not one or the other for Energy East; no promise has ever been made to halt rail shipments if a pipeline is built. Further, the more dilbit that is shipped by pipeline, the greater the need for diluent (a refining by-product). We have no guarantee that this doesn’t mean that Saudi diluent won’t be shipped by rail from the East Coast to Alberta. And diluent is far more toxic than bitumen.

Now for what you haven’t been told.

#1: It is possible to ship bitumen by rail cost-effectively without any diluent. In this state it is called “Neatbit”. As such, it is five to ten times more viscous than molasses, and is considered non-flammable because it has a flash point of 148°C. Energy East proposes to ship dilbit which has a flashpoint of -35°C, making it flammable at almost any temperature in Canada, more so than regular oil. A crashed Neatbit rail car if ruptured would likely bleed out very slowly, if it did so at all. The result would be a heap of bitumen beside the car that is unlikely to seep into soil or water. Further, it will only burn if flame is focused on it, and it does not explode. And this option does not incur the cost or risk of diluent, moves more end-product per shipment, and does not burden the refinery with 30% of the mixture that is unwanted.

#2: A pipeline when no longer required is useless and is left to rot in the ground. A rail line that is no longer needed for moving bitumen can be used for a hundred or more years to move people and goods efficiently. In fact, rail is one of the most promising modes of transport for the future because it can be run with 100% clean electricity, and is well suited for the impending era of decarbonisation. If we want a truly “Nation-Building project”, let TransCanada build an electric railway joining Alberta to the East coast. That would give their balance sheets more value when the carbon bubble bursts.

#3: If rail were to be used, the least expensive route is to the Gulf Coast and to heavy crude refineries in the USA. No need to move through North Grenville.

#4: If a pipeline to the East or West coast wasn’t to be built, there is still sufficient existing pipeline capacity for the next 10 years. Any need for additional capacity can be met cost-effectively by rail to the Gulf Coast, which is where the greatest demand is anyway.

#5: The demand for oil is decreasing. Very recently Royal Dutch Shell Plc stated that they see global oil demand peaking in as little as 5 years. This means that the price of oil is extremely unlikely to ever rise again. That means only tar sands projects that are already built will produce bitumen. In fact, Exxon followed the lead of many others by announcing that it is writing off 3.6B barrels of proven tar sands reserves because the cost of making bitumen is uneconomic at foreseen prices; that and the plentiful higher quality, less expensive oil that is available while the world weans itself off fossil fuels.

If you’re not sure about this, ask yourself how many oil trains you’ve seen passing through North Grenville in the last two years compared to how many there were when the price of oil was $100/barrel. Not many. And why: because of the price of oil and the abundance of higher quality oils from conventional sources. There are so many reasons why the days of $100 oil are long gone. And with it go oil trains through North Grenville.

To summarize, Energy East requires that we not only be exposed to the risk of spilled dilbit, but also to the risk of diluent by rail.  Unlike the dilbit in pipelines, rail “Neatbit” is not explosive and poses very little environmental risk. But it is not one or the other, is it. In fact, it might be both or none: pipelines and diluent trains or nothing. It would appear that the pipeline industry is exploiting our ignorance of the available options with a deliberate misconception of rail transport dangers.

So, if the fossil fuel industry wants to ship through North Grenville, let’s demand they do it with Neatbit on new rails; that they build a rail depot, stay in new hotels and put some money into our economy. Then after the bitumen is no longer being mined, North Grenville can be a stop-over for passengers and railway workers using the new age infrastructure that would be the legacy of the fossil fuel industry.

Helping North Grenville become a more sustainable community