Canadian oil rides south even without Keystone pipeline
From CNBC - great article
CN Share to double in 1 year..!
The equivalent of hundreds of thousands of barrels of oil a day will soon be moving from western Canada into the U.S.—even if the controversial Keystone XL Pipeline is never built.
The energy industry is moving full steam ahead to move crude on rail cars—a fast growing business, booming along with increased North American oil production and already responsible for moving most of the oil out of the Bakken region in North Dakota.
As the U.S. contemplates the merit of the stalled Keystone pipeline project, which would take Canadian oil to U.S. Gulf Coast refineries, rail companies in Canada have been moving quickly to add capacity in five major projects. By the end of next year, rail loading capacity could grow enough to handle 700,000 barrels of crude a day from the oil sands region in western Canada, according to IHS data. Trains currently carry just 150,000 barrels from there, and more than 450,000 barrels a day could be riding the rails by the end of next year……..
Oil sands crude is probably better shipped by rail. It does not move well in a pipeline because it is so heavy. Needs to be diluted with an oil product such as naphtha, which then needs to be removed. The naphtha also must be shipped top the oil sands area. It adds cost and additional operational issues.
If the oil is being transported in in tank cars know as DOT-111, then there is a problem. These tanks have been know to derail, and know to puncture. In 1991 the NSTB said these tanks need to be updated. 70,000 are in service now and would cost at an estimate of more than $1 billion to be retrofitted the tank so it is less likely to puncture.
This type of tank car was one reason of the damage done in a 2009 derailment in Rockford, IL that caused millions dollars of damage and loss of life. Although, the oil moving via rail will be good for the company, all rail roads will have an issue if transported in these DOT-111 type tanks that are not updated to what the NSTB is looking for.