Category Archives: Canadian oil trains

From California to Alberta: we must stand against tar sands

Repost from
[Editor: STAND is asking for your signature on a petition.  Go here.  – R.S.]


The science is in— tar sands oil is much dirtier than conventional crude. It has an outsized climate impact, is terrible for air quality, and when it spills it’s much harder to clean up than conventional crude oil. And now Phillips 66 wants to expand its refinery to process more tar sands in the San Francisco Bay Area.

This would significantly increase the amount of oil tankers coming into the Phillips 66 refinery in the bay! In addition to its negative impacts on California,increasing tar sands production is bad for indigenous communities at the source in Alberta, and transporting it via oil tankers threatens devastating oil spills in the waters of British Columbia, Washington, and Oregon as well.

It’s important that the Bay Area Air Quality Management District (BAAQMD), Contra Costa County Board of Supervisors, Gov. Newsom, and other key decision makers do everything they can to stop Phillips 66 from completing this expansion project.

Thanks to public pressure from people like you, in 2017 we defeated Phillip 66’s plan to build an oil train terminal in San Luis Obispo that would have also imported tar sands. Phillips 66’s marine terminal and refinery expansion is their last ditch effort to bring more dangerous and dirty tar sands to their Bay Area refinery and we need your help. Will you join us in urging Gov. Newsom and other key decision makers to reject this harmful proposal?

To BAAQMD, Contra Costa Board of Supervisors, Gov. Newsom, and other key decision makers in California:

Tar sands oil harms our air, water, climate, and indigenous communities. We respectfully urge you to reject Phillips 66’s refinery expansion that would double the number of tankers delivering to their refinery and allow them to process tar sands.

To add your voice, click here.


    Derailments raise questions about the surge in oil trains

    Repost from The Star, Toronto, Ontario

    Derailments raise questions about the surge in oil trains

    By Gillian Steward, Mon., March 11, 2019
    A train derailment is shown near Field, B.C., on Feb. 4. A Canadian Pacific freight train fell more than 60 metres from a bridge near the Alberta-British Columbia boundary in a derailment that killed three crew members. The westbound freight jumped the tracks at about 1 a.m. near Field, B.C.
    A train derailment is shown near Field, B.C., on Feb. 4. A Canadian Pacific freight train fell more than 60 metres from a bridge near the Alberta-British Columbia boundary in a derailment that killed three crew members. The westbound freight jumped the tracks at about 1 a.m. near Field, B.C. (JEFF MCINTOSH / THE CANADIAN PRESS)

    Now that so much oil is being shipped by rail from Alberta to points south and west, the sight of a crumpled freight train on the banks of the Kicking Horse River high in the Rocky Mountains has taken on a new twist.

    Normally most of that oil would be shipped by pipeline but with the Trans Mountain project and other pipeline expansions stalled or abandoned, the oil industry has taken to shipping the stuff to refineries and ports by train.

    A coalition of Indigenous and environmental groups along with the B.C. government successfully stalled the Trans Mountain pipeline expansion that would carry diluted bitumen from Alberta through B.C. But is this what they wanted? Trains loaded with oil navigating narrow mountain passes, rolling through small communities?

    Three crewmen were killed in that horrific derailment in early February when a loaded, parked, Canadian Pacific train of 112 cars started to roll down the track west of Lake Louise.

    According to the Transportation Safety Board, it barrelled along for three kilometres before 99 cars and two locomotives toppled off a curve ahead of a bridge and into or near the river.

    The only saving grace from this accident is that none of the derailed cars contained bitumen, heavy oils, or other petroleum products. If they had there would have been a toxic mess that would no doubt have cost millions of dollars to clean up.

    There have been other CP derailments since. Not as deadly as the one in the Kicking Horse Pass but enough to raise questions about the dangers of shipping oil by train instead of pipeline.

    On Feb. 28, 20 rail cars went off the tracks west of Banff. Three days later rail cars carrying diesel fuel and grain went off the tracks in Golden B.C. The next day 20 cars on a CP train derailed in Minnesota. And just this past Saturday two CP trains collided in the rail yards in Calgary forcing at least a dozen cars off the tracks.

    Again, there were no dangerous goods spilled. But I have seen trains with well over 100 oil tankers roll through Calgary. During the 2013 flood a CP train carrying petroleum products derailed on a bridge and hung precariously over the surging Bow River.

    According to the National Energy Board trains are shipping record amounts of oil. Between December 2017 and December 2018 crude oil exports by rail more than doubled to 353,789 barrels a day — add on domestic shipments and the total is even higher.

    And it isn’t about to slow down.

    Alberta Premier Rachel Notley recently announced her government will spend about $3.7 billion to lease about 4,400 new rail cars to move up to 120,000 barrels per day by 2020, with shipments starting as early as July this year.

    Apparently, trains loaded with oil rolling through B.C. isn’t what John Horgan’s government had anticipated when it vowed to use all the tools in its tool box to block the Trans Mountain pipeline expansion.

    Because now the B.C. government wants more regulatory control over rail shipments of heavy oil even though rail transportation falls under federal jurisdiction. And it wants to know exactly how much heavy oil is being shipped by rail in B.C.

    So far that information has only been made available to federal agencies. B.C. will argue its case before the B.C. Court of Appeal on March 18.

    It’s obvious that the B.C. government and its supporters don’t want any bitumen or heavy oils transported through B.C. This is not just about the expansion of one pipeline, it’s about stopping heavy oils, a key resource in Alberta, from being shipped anywhere by any means in B.C.

    But now the B.C. government is dealing with the law of unintended consequences.

    Holding up the Trans Mountain pipeline has led to more oil trains, and heightened the possibility that one of them could derail and spill barrels of heavy oil.

    Horgan is no doubt praying that there will be no derailment of oil cars anywhere in B.C. Because if that happens he will have a lot to answer for.


      Canadian province of Alberta leases 4,400 rail cars – enters crude by rail business

      Repost from Reuters

      UPDATE 2-Canadian province of Alberta leases 4,400 rail cars to clear oil glut

      By Rod Nickel, February 19, 2019 / 12:06 PM

      WINNIPEG, Manitoba, Feb 19 (Reuters) – Canada’s oil-producing province of Alberta has leased 4,400 rail cars in a multibillion-dollar move to clear a glut of crude that depressed prices, Premier Rachel Notley said on Tuesday.

      Notley said Alberta would start putting cars into service in July so it can buy and sell oil itself. Canadian National Railway Co and Canadian Pacific Railway Ltd will haul a combined initial volume of 20,000 barrels per day that will reach 120,000 bpd by mid-2020.

      Alberta’s rail investment is part of a rescue package for an oil industry struggling with high costs and the exit of some foreign majors. Pipelines have become congested because of environmental opposition that has stymied expansion.

      The provincial government took the rare step in January of ordering oil production cuts.

      “Rather than produce less, we have to find ways to move more,” Notley said in Edmonton.

      The three-year plan will cost Alberta C$3.7 billion ($2.80 billion), consisting of buying oil, leasing cars and purchasing rail and loading services. Alberta expects to earn gross revenues of C$5.9 billion ($4.5 billion) from reselling oil and higher royalties to produce net revenues of C$2.2 billion.

      Shares of CN and CP gained nearly 1 percent in Toronto. CN expects to handle 60 percent of Alberta’s barrels, Chief Executive J.J. Ruest said in a statement.

      The Alberta government said in November, when Canadian oil fetched near record-large discounts to U.S. oil, that it was seeking train capacity. It has also provided incentives for petrochemical and partial-upgrading plants.

      Canadian crude-by-rail volumes hit record highs last year, but declined in 2019 after production cuts made rail shipments less economic. Imperial Oil said it was forced to cut its own rail shipments to “near zero,” illustrating the potential for unintended consequences when governments intervene.

      Economic conditions were already improving for rail shipments, Notley said.

      Rail shipments are seen as a relief valve for oil when pipelines are full, but they are generally more expensive and less safe. A CN oil train derailed on Saturday in Manitoba.

      Notley’s New Democratic Party government faces a stiff spring election challenge from the United Conservative Party (UCP). UCP energy critic Prasad Panda said the party was reviewing the rail plan.

      Three-quarters of the cars will be the DOT-117J model, featuring thicker steel than some types. The rest will be DOT-117R cars retrofitted to meet some DOT-117J standards, but a type that BNSF Railway Co is phasing out after a derailment in Iowa last year. ($1 = 1.3205 Canadian dollars)

      (Reporting by Rod Nickel in Winnipeg, Manitoba; Editing by Chizu Nomiyama and Peter Cooney)

        Canadian railways sign deal for more tar-sands crude by rail

        Repost from Reuters
        [Quote: “Increased crude shipping by rail…would represent progress in moving more Canadian oil to U.S. refineries.” ]

        Cenovus inks deal to move more crude on Canadian National Railway -source

        by Julie Gordon, Rod Nickel, September 7, 2018 / 11:18 AM

        VANCOUVER/WINNIPEG (Reuters) – Cenovus Energy Inc (CVE.TO), a major Canadian oil producer, has signed a deal to move more crude with the Canadian National Railway Co (CNR.TO), a source with direct knowledge of the matter told Reuters.

        Rail cars including crude tankers are seen at the Canadian Nationals (CN) Thornton Railroad Yards in Surrey, British Columbia, Canada, June 21, 2012. REUTERS/Andy Clark/File Photo

        The deal is one of many being quietly signed that, along with the expedited deliveries of new locomotives, will help boost Canada’s crude-by-rail shipments 50 percent by year end, a government consultant told Reuters separately.

        The source said the Cenovus-CN deal was inked days before a Canadian court last week overturned the approval of the Trans Mountain oil pipeline expansion.

        Shipper commitments put CN and smaller rival Canadian Pacific Railway Ltd (CP.TO) in position to collectively move more than 300,000 barrels per day by December, said Greg Stringham, a consultant who mediated talks among oil producers and railways for the Alberta government this year.

        Stringham did not directly address the Cenovus deal, but said new crude-by-rail “contracts are being signed. Not all of those been disclosed yet, but it is continuing.”

        Oil train cars are stopped in their tracks as smoke from a fire rises at the Port Metro Vancouver, British Columbia, Canada, March 4, 2015. REUTERS/Ben Nelms/File Photo

        The railways, burned a few years ago when booming demand for crude-by-rail vanished as oil prices fell and pipeline space opened, are now seeking rich multi-year, take-or-pay deals from producers.The 300,000 bpd would be 50 percent higher than June’s record 200,000 bpd and double 150,000 bpd achieved in December 2017. It is expected to further increase in 2019 as locomotive orders start to catch up with demand.

        The two railways and Cenovus declined to comment. The source declined to be identified as the deal is not public.

        Cenovus CEO Alex Pourbaix said in July that he was considering a multi-year commitment to move 50,000 to 60,000 bpd by rail.

        Cenovus shares rebounded to trade up as much as 0.86 percent soon after the news. Earlier in the day, they had fallen 6.4 percent after Goldman Sachs downgraded the stock to sell.

        CN shares were down 0.5 percent.


        Increased crude shipping by rail, while still far short of Western Canada’s rail-loading capacity of nearly 1 million bpd, would represent progress in moving more Canadian oil to U.S. refineries. It remains a tiny fraction of the total 3.3 million bpd on average exported, mostly to the U.S., in 2017.

        But as crude shipments increase, so do safety concerns. In 2013, a runaway train carrying crude exploded in the Quebec town of Lac Megantic killing 47 people. In June, some 230,000 gallons of crude spilled into an Iowa river after a train derailed.

        The head of Canada’s transportation regulator said last month that stronger tank cars for transporting flammable liquids should be required sooner than a 2025 deadline.

        Enbridge Inc’s (ENB.TO) oversubscribed Mainline pipeline rations space each month as oil producers expand production, driving a bigger discount in Western Canada’s heavy crude compared to the North American benchmark CLc1.

        The increased crude by rail volumes could not happen without new locomotives that the railways are placing into service faster than before.

        “Probably the biggest constraint that was identified was the lack of locomotives being available,” said Stringham, adding that the railways went to their suppliers and were able to cut delivery times from 24 months down to nine to 12 months. CN said on Wednesday that it had ordered an extra 60 locomotives from General Electric Co (GE.N), adding to a previous deal for 200 locomotives over three years. The original order will now be completed in two years, and the additional 60 are due in 2020, CN spokesman Patrick Waldron said. Those locomotives will be used for energy transport, along with intermodal, coal and agricultural products. Western Canada’s crude inventories reached 36.3 million barrels for the week ending Aug. 31, a record level since Genscape began monitoring in 2010 as oil production expands faster than transport capacity, analyst Dylan White said.

        Reporting by Julie Gordon in Vancouver, Rod Nickel in Winnipeg; additional reporting by Allison Lampert in Montreal; Editing by Denny Thomas and David Gregorio