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Tale of the Tape: Pipelines vs Rail

A comparison of two ways to move oil

Mar 15, 2017

by Alberta Venture Staff

Oil-industry boosters and environmentalists usually have radically different views about the future of the oil sands. What both sides have to acknowledge, however, is that the product being produced from the oil sands needs to be moved somehow. Unfortunately, that’s often all they can agree on, for the merits of transporting it via pipeline or rail are sharply contested. Here, we try to break down the arguments on both sides.

Pipelines
Rail

Volume shipped
On average, pipelines move about 97 per cent of petroleum products and natural gas in Canada. In 2013, 2,479 million barrels of oil equivalent (boe) of oil and gas travelled through pipelines

Volume shipped
On average, just three per cent of petroleum products in Canada are transported over rail, tanker trucks and tank vessels. In 2013, 167 million boe (about seven per cent) was transported by rail

Expense
$5/barrel

Expense
$10-$15/barrel

GHG Emissions
Produce 61 to 77 per cent less GHG emissions than rail

GHG Emissions
More efficient than pipelines for small-scale transportation

Safety
73 per cent of “occurrences” were spills less than one cubic metre. Pipelines spill more volume but don’t explode. There are about 280 significant pipeline spills (fatality, hospitalization or >$50,000 in damages) annually in the U.S.

Safety
Spills are more frequent but smaller. More prone to catching fire or causing property damage. The Association of American Railroads said the rate of hazardous-material spills from rail cars was 2.7 times the risk of spills from pipelines. According to the right-wing Fraser Institute, moving oil and natural gas by pipeline is estimated to be 4.5 times safer for the environment than transporting it by rail

Frequency of “occurrences”
0.049 per 1,000 boe transported

Frequency of “occurrences”
0.227 per 1,000 boe transported

Worst-case scenario
In 2010, an Enbridge pipeline ruptured and spilled more than one million gallons of crude oil into the Kalamazoo River. The cleanup cost about $1 billion

Worst-case scenario
In July 2013, a freight train carrying crude oil derailed in the Quebec town of Lac-Mégantic, causing rail cars to explode and killing 47 people. It was the deadliest non-passenger train accident in Canadian history. It also resulted in 1.5 million gallons of oil spilling, and cost about $150 million to clean up and rebuild

Volume forecasts
With major projects in regulatory or construction stages, and in the absence of Keystone XL, Canadian crude is in a three-to-five-year period of constrained capacity

Volume forecasts
In the decade following 2003, oil-by-rail shipments jumped 166 per cent, with rail capacity for crude between Alberta and the U.S. Great Plains tripling in 2011 alone, to 300,000 barrels per day. When the U.S. blocked construction of Keystone XL, it was estimated that rail shipments in Canada would increase by 42 per cent by 2017

1,000,000 Gallons
1,500,000 gallons

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