A top official at North Dakota’s Mineral Resources Department said Thursday that as much as 90 percent of the state’s crude will move by freight rail in 2014, just one day before announcing record oil production of almost 1 million barrels per day — or approximately 5 percent of total U.S. oil consumption.
A million barrels a day is more than the capacity of the controversial Keystone XL pipeline, which would transport 830,000 barrels per day. The fact, according to Centre for Research on Globalization (CRG), has led some in the oil industry to believe that heavy crude oil derived from Canada’s tar sands will find a way to refineries regardless of whether Transcanada’s controversial Keystone XL pipeline is approved.
“Even if President Obama rejects the pipeline, it might not matter much,” CRG said, noting that the recent crude-by-rail boom is good news for tar sands advocates. “Tar sands advocates are happy to promote the idea that continued development of the tar sands is inevitable because it implies that opposition to Keystone XL is futile and that Americans should therefore cash in on its jobs and construction expenditures before somebody else does.”
CREDIT: American Enterprise Institute
However, those who are concerned about the safety of the proposed 1,179-mile, 36-inch-diameter crude oil pipeline would not have their fears quelled by an increase in crude-by-rail traffic, which has recently come under fire following a tragic tanker accident in Quebec last July that killed 47 people. And though that accident was the worst, it was not the only major derailment of an oil freight train this year. In March, a Canadian Pacific Railway spilled 30,000 gallons of tar sands oil in western Minnesota, which Reuters called “the first major spill of the modern North American crude-by-rail transit boom.” In October, a train carrying crude oil and liquefied petroleum gas derailed west of Alberta, Canada, causing an explosion and fire. And in November, a 90-car train carrying North Dakota crude derailed and exploded in a rural area of western Alabama, which the Huffington Post called “the most dramatic U.S. accident since the oil-by-rail boom began.”
As the CRG notes, only a small fraction of oil shipped by rail in North America consists of the “heavy crude” that is produced in the tar sands region. The rest is U.S. “light crude,” which the primary type produced in North Dakota. Light crude, according to CRG, is “hydrogen-heavy and carbon-light,” which enables it to flow easily but also makes it “alarmingly explosive.”