Oil exports by rail ramping up, but still far eclipsed by pipeline movements

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CALGARY – New National Energy Board data shows oil-by-rail exports have risen ninefold in less than two years, but they’re still far eclipsed by what’s moving by pipeline — and by what the stalled Keystone XL alone aims to carry.

The Canadian energy regulator’s figures released Monday show more than 146,000 barrels per day were exported on trains to the United States in the last three months of 2013, compared with just under 16,000 in the first three months of 2012.

But in all of 2013, less than five per cent of Canada’s 2.6 million barrels per day of crude oil exports moved by rail according to a separate NEB report released in March, which also showed pipeline exports growing much more dramatically than those moving by rail between 2012 and 2013.

“Obviously oil by rail is ramping up, but it’s still relatively small potatoes,” said Greenpeace campaigner Keith Stewart.

Oil exports by all modes have been increasing, said NEB spokeswoman Tara O’Donovan.

“With the existing oil pipelines being generally full, the shippers have to find some way for their product to get to market, so they’ve turned to rail,” she said, adding rail also allows access to markets where there are no pipelines.

The U.S. State Department’s final environmental report on the Keystone XL oil pipeline took crude-by-rail growth into account when it determined that increased oilsands development — and its accompanying contribution to climate change — would not hinge on a single pipeline being built.

The U.S. report said rail loading facilities in Western Canada are expected to hit a capacity of more than 1.1 million barrels per day by the end of this year, most of which would be in heavy oil-producing areas. When it released its report in January, the U.S. State Department estimated about 180,000 barrels per day of Canadian crude had already been moving by rail.

The NEB says of the crude that was exported by rail in 2013, 45 per cent — around 60,000 barrels per day — went to the U.S. Gulf Coast, the refining market coveted by backers of Keystone XL, which aims to ship 830,000 barrels per day of crude. A similar amount went to the Eastern Seaboard.

Rail plays a “complementary” role to pipelines, said Geraldine Anderson, with the Canadian Association of Petroleum Producers.

“We’ve always used rail in some capacity and, going forward, we’re going to need all modes of transportation, be it rail, be it pipeline, be it tankers to complement each other and to get our product to market.”

Greenpeace’s Stewart said he finds it “alarming” that crude-by-rail continued to rise after July 2013, when a fiery wreck in Lac-Megantic, Que., killed 47 people. According to the NEB, rail exports grew by around 18 per cent between the third and fourth quarters of last year.

“I don’t think this would have happened if oil companies were actually liable for damages,” he said, calling the way risk is divvied up “crazy.”

“The oil companies get the benefit. The rail companies and communities face the risk.”

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