Canada Not Waiting For Obama’s Decision on Keystone XL

by Greg Pollowitz

They’re just going to ship their oil from Alberta to the United States on trains instead. Via the New York Times:

Over the past two years, environmentalists have chained themselves to the White House fence and otherwise coalesced around stopping the Keystone XL pipeline as their top priority in the fight against global warming.

But even if President Obama rejects the pipeline, it might not matter much. Oil companies are already building rail terminals to deliver oil from western Canada to the United States, and even to Asia.

Since July, plans have been announced for three large loading terminals in western Canada with the combined capacity of 350,000 barrels a day — equivalent to roughly 40 percent of the capacity of the proposed Keystone XL pipeline that is designed to bring oil from western Alberta to refineries along the Gulf Coast.

Over all, Canada is poised to quadruple its rail-loading capacity over the next few years to as much as 900,000 barrels a day, up from 180,000 today.

The acceleration has come despite a derailment in the lakeside Quebec town of Lac-Megantic in July, in which a runaway oil train bound for a refinery in eastern Canada exploded, killing dozens of people and bankrupting the railway company. That accident and others more recently have renewed concerns about the safety of transporting oil by rail, and given an added argument to some who favor the Keystone XL pipeline.

“They don’t give up,” Jesse Prentice-Dunn, a Sierra Club policy analyst, said of the oil industry.

If all the new terminals are built, Canada will potentially increase its exports to the United States by more than 20 percent — even if Keystone XL is never built.

Shipping by rail can cost an additional $5 or more per barrel, but oil companies have decided that they cannot afford to wait.

“The indecision on Keystone XL really spawned innovation and mobilized alternatives, and rail is a clear part of the options available to our industry,” said Paul Reimer, senior vice president in charge of transport and marketing at Cenovus Energy, a Canadian oil company that is planning to increase rail shipments from 7,000 barrels a day to as many as 30,000 barrels a day by the end of 2014.

Good news: Now building Keystone XL will reduce carbon emissions by cutting down on train traffic.

The rest here.