Rail disaster underscores risks in oil transportation

By Zain Shauk and Jennifer A. Dlouhy
Houston Chronicle

A deadly crude oil train disaster in Canada has brought renewed scrutiny to the growing use of rail to carry oil – including hundreds of thousands of barrels in Texas – and prompted worries that the higher volume will mean more accidents.

Though rail proponents say moving crude by train is safe, federal regulators and others say that pipelines are safer, a stance that has played a role in the debate over the planned Keystone XL pipeline from Canada to the Texas coast.

And regardless of the relative safety of the two transportation modes, the mere fact that more crude trains are on the rails increases the possibility of accidents like the one Saturday in Lac-Mégantic, Quebec.

At least 13 people died and dozens were injured as a portion of the town was flattened by exploding carloads of oil when a train derailed there.

Disaster: Death toll grows in Canada oil train accident

The train was moving oil east from the Bakken shale play in North Dakota to a refinery in Canada, the Associated Press reported.

Parties to the political debate over transport were muted in their response to Saturday’s tragedy. The oil industry lobbying group American Petroleum Institute declined to comment and a representative from the Natural Resources Defense Council did not respond to phone calls.

Rail car loads soar

The Sierra Club environmental group expressed wishes for the safety of residents and responders in Lac-Mégantic, and said the accident “strengthens our resolve to move beyond fossil fuels so communities in Canada, the U.S. and around the world are no longer threatened by industrial disaster, toxic pollution and climate disruption.”

Energy companies are moving more oil by rail because trains can serve markets that don’t have pipelines, said Jackie Forrest, senior director of North American oil market research for IHS.

And as railways have taken on more oil business, they are trying to make their offerings cheaper and more appealing to energy companies.

While 90 percent of crude oil typically has been transported by pipeline in the United States, the U.S. Energy Information Administration reported earlier this year that railcar loadings of crude oil and other petroleum products jumped 46.3 percent in 2012, as pipelines couldn’t keep pace with surging production.

Within Texas, trains and barges carried 401,700 barrels of crude and petroleum liquids daily last year, up from 362,732 barrels per day in 2011, according to the Texas Railroad Commission, which regulates the state’s oil and gas industry. Spokeswoman Ramona Nye said the commission estimates as much as 95 percent of that is rail transportation.

Shipments head east

Though pipeline companies have expanded their networks, rail retains an advantage it isn’t likely to lose soon in some regions, including the Bakken area, Forrest said.

Because there are no solid plans for pipelines to transport oil east from the Bakken, she said, refineries have turned to rail and other options for supplying their raw material.

Houston-based Phillips 66 already is moving oil by rail from the Bakken to its Bayway refinery in New Jersey and Valero is exploring a rail option for moving large quantities of Bakken crude east to its Quebec refinery.

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With a rapidly changing energy landscape, the nation’s infrastructure will need to catch up to improve safety, said Diana Furchtgott-Roth, a senior fellow with the Manhattan Institute.

She said in a report last month that an analysis of U.S. Transportation Department data found fewer than one incident involving pipelines per billion ton-miles, compared with 19.95 incidents per billion ton-miles for trains.

“Pipeline is vastly more safe,” she said. “Pipelines result in fewer spillage incidents and personal injuries than road and rail.”

But pipelines spill more oil in absolute numbers because of the nation’s vast pipeline network.

An average of 6.6 million gallons of petroleum products were released accidentally from pipelines each year from 2005 to 2009, according to Furchtgott-Roth’s analysis.

During the same period road transportation spilled an average 477,600 gallons a year and trains spilled 83,800 gallons.

“Although the number of incidents, the injuries and fatalities are lower for pipeline, when there is an incident, the amount spilled is larger,” Furchtgott-Roth said in an interview.

Shauk reported from Houston and Dlouhy from Washington. Jeannie Kever contributed from Houston.