Category Archives: Crude By Rail

Canada Is Now A Land Of Oil Trains… wonder where it’s all going?

Repost from Huffington Post Canada
[Editor: …and this Canada news is relevant here in the U.S. because…?? Well, check out the map below.  – R.S.]

Canada Is Now A Land Of Oil Trains

This is happening even as Canadian crude sells at prices not seen in the oil markets since the 1990s.

By Daniel Tencer, 11/21/2018 12:04 EST

Crude oil and other petroleum products are transported in rail tanker cars on a Canadian Pacific Railway train near Medicine Hat, Alta., Sept. 10, 2018.
Crude oil and other petroleum products are transported in rail tanker cars on a Canadian Pacific Railway train near Medicine Hat, Alta., Sept. 10, 2018. LARRY MACDOUGAL/CANADIAN PRESS

Canada’s oil industry is facing record-low prices for its exports, a glaring lack of infrastructure to bring its product to market, and an uncertain long-term outlook.

But none of that is stopping the oil patch from increasing production. And as one pipeline project after another fails to launch, the industry is relying more heavily than ever to ship its oil by rail.

According to Statistics Canada, the volume of oil on Canada’s railroads has soared by 64.6 per cent in just the past year. And in the past seven years, the number of rail cars carrying oil across Canada has quadrupled.

Oil-by-rail shipments in Canada reached a record high of nearly 20,000 rail cars in August this year. By volume, oil-by-rail is up by more than 64 per cent in the past year. HUFFPOST CANADA 

The spike in oil trains began around 2011, a few years before the July, 2013, disaster in which a 74-car oil train derailed in Lac-Megantic, Que., killing 47 people.

Besides the obvious risk to the environment and to human life, there is also the fact that oil producers are crowding out other industries that rely on rail.

This leads to “higher costs and shipping delays for other industries,” Bank of Montreal senior economist Sal Guatieri wrote in a client note Tuesday.

“Surging railway loadings of oil contrast with flat loadings for shipments of wheat, copper, machinery and many other products in recent years.”

And if you think these oil trains don’t come through your neighbourhood, that they’re somehow limited to Alberta, take a look at this map of the oil rail network in Canada, provided by the Canadian Association of Petroleum Producers:

A map of Canada’s oil-by-rail network and its connection to U.S. terminals. CANADIAN ASSOCIATION OF PETROLEUM PRODUCERS  [click to enlarge]
This massive expansion of oil-by-rail took place even as oil prices remained relatively weak, Canadian oil exports particularly so. This is especially true today; North American oil prices have dropped by some 31 per cent since a peak in early October, and closed at around US$53 on Tuesday.

Canadian oil has been selling at an enormous discount to that, recently trading below $14 a barrel. The last time global oil prices were anywhere near that low would have been the late 1990s.

But it’s not just Canada that seems to be desperate to get as much of its oil out of the ground right now as possible.

“Saudi Arabia is pumping oil like never before, its output surging to a record 10.6 million barrels per day in October,” National Bank of Canada economist Krishen Rangasamy wrote in a client note Wednesday.

“Iraq’s output is also on the rise as production from the Kirkuk region comes back online. Those are more than offsetting declines in sanction-hit Iran.”

Not to mention, U.S. oil extraction has surged in recent years to the point it is now the world’s largest producer of crude.

Meanwhile, traders are losing faith in oil’s prospects as the global economy shows signs of weakening.

“The deceleration of world economic growth ─ as evidenced by ugly (third-quarter economic) results in places such as Japan and the Eurozone … has clearly hurt demand for oil,” Rangasamy wrote.

Amidst all this, some executives in Canada’s oil patch have called for the Alberta government to use its existing powers to limit the amount of oil being pumped. So far, the province hasn’t indicated it plans to follow that advice.

Hey, at least we get cheaper gas

But there is one benefit to consumers from crude producers’ race to the bottom of the oil deposit: Lower fuel prices.

“The free-fall on energy markets … helped force down pump prices across Canada by 2.1 cents a litre to $1.13, their lowest since October 2017,” analyst Dan McTeague of GasBuddy wrote this week.

“As pump prices now stand 5.6 cents a litre lower than on this same day last year, much of the credit can be given to the unexpected and likely temporary decline in oil prices, which could be subject to an upturn once OPEC and Russia agree to production curbs beginning in December.”

    Senators question railroads on oil train braking systems

    Repost from Transportation Today
    [Editor: I challenge Senators Feinstein and Harris (and Attorney General Becerra) to follow the lead of Senators Wyden and Merkley.  These “positive train control” braking systems, or “electronically controlled pneumatic” (ECP) braking systems – were supposed to be in place nationwide long ago, but every time a deadline approached, the railroad lobby won a delay.  Now they have Trump on their side.  Some background in this 2015 CNN report, “Amtrak derailment: Could technology have prevented crash?”.  – R.S.]

    Lawmakers launch railway safety standards inquiry

    BY DOUGLAS CLARK, OCTOBER 19, 2018

    Union Pacific

    Sens. Ron Wyden (D-OR) and Jeff Merkley (D-OR) are seeking answers from two railway company’s regarding plans to ensure trains carrying hazardous material have updated braking systems.

    To do so, the Oregon senators recently forwarded correspondence to Union Pacific and BNSF in the wake of the Trump Administration’s announcement to roll back an Obama-era rule requiring the installation of electronically controlled pneumatic braking systems by 2021. The legislators noted that the guideline was instituted after multiple oil train crashes across the United States, including one in the Columbia River Gorge.

    “Too often our constituents in the Pacific Northwest have seen trains carrying crude oil crashing within and around their communities,” Wyden and Merkley wrote. “We have seen these trains crash near school buildings, small businesses, and homes, causing extensive damage to communities and putting our environment at risk, including sources of drinking water as well as river habitats that house endangered fish species.”

    In their letter, the lawmakers inquired about how many of the railway companies’ trains carrying crude oil in Oregon and Washington have ECP brakes installed; the percentage of trains carrying crude oil through Oregon and Washington have ECP brakes; and whether the rule rollback impact purchasing of new railcars with ECP brakes.

    The legislators maintain their constituents should be afforded security from potential railway transport dangers.

    “Our constituents, many of whom live, work or go to school in the vicinity of rail lines that carry hazardous materials, need to know that their safety is being protected,” the legislators wrote.

      Our Benicia Election is a referendum on Climate Change

      By Roger Straw, October 12, 2018

      MY LIFE IN PERSPECTIVE – THE CLIMATE AND OUR LOCAL ELECTION

      Roger Straw, Benicia

            For the first 35 years of my adult life, my priority was on peace and freedom, justice and equality under the law. That and helping folks in need.
            Sometime in 2007, a friend and colleague spoke convincingly to me about the planetary threat of climate change, global warming.  I was skeptical, but I didn’t argue with her.  I listened, and somehow, I came to understand that everything – EVERYTHING – is at stake, that creation itself is in the balance.  The science is indisputable.
            My life since then has revolved around environmental causes, and I’ve taken seriously the mantra, “Think globally, act locally.”  I’ve helped elect Benicia leaders who share my views; I’ve campaigned against bulldozing development on Seeno land; I’ve helped organize Benicians to successfully deny giant Valero’s dangerous and dirty crude by rail proposal; I’ve helped awaken Benicia to the serious need of better air monitors in and beyond the refinery.
            These concerns are front and center as I consider my vote for City Council this fall.
            One candidate spoke out repeatedly in favor of toxic and potentially explosive oil trains: Lionel Largaespada.  He’s a nice guy but he doesn’t belong in a position of power at the heart of our city.
      Another candidate was a deciding vote in 2016 to stop Valero’s oil train proposal in its tracks.  Christina Strawbridge will get a lot of votes for that, and she should.  I hope Christina wins, but it’s hard to overlook many of her votes.  She frequently voted with business-friendly and environmentally insensitive colleagues.  For instance, she voted in favor of Seeno development, in favor of a nearly million-dollar give back to Valero, and in favor of a budget that discontinued employment of Benicia’s Climate Action Coordinator.
            The one candidate who stands out as a shepherd of the planet’s future is Kari Birdseye.  Thoughtfully independent and caring, she now presides collaboratively over Benicia’s Planning Commission, where she voted in 2016 to send Valero’s oil train proposal down the tubes.  Her professional work is for an award-winning environmental non-profit.  She’s also a mom, with a long history of involvement in Benicia’s schools, where she has raised funds for good causes and led everyday moms and dads to unite for constructive outcomes.  Those abilities will be needed in our future as we work together to build economic diversity and sustainability in our beautiful, family-friendly art town by the Strait.
            I have come to know Kari personally.  She’s a straight shooter, tough and yet nurturing, open to conversation and compromise, but with eyes always peeled for the good of mother earth, the air, land and water.
            Kari Birdseye is my number one priority in this election.  And I hope she will be yours as well.  Check her out, order a yard sign, volunteer and donate at BirdsyeForBenicia.com.