This article was published in Scientific American’s former blog network and reflects the views of the author, not necessarily those of Scientific American
Posting here primarily to document the stresses and constraints associated with North America's newfound oil and gas wealth (via Wunderground):
Canadian National spokesman Louis-Antoine Paquin said 13 cars — four carrying petroleum crude oil and nine loaded with liquified petroleum gas — came off the tracks around 1 a.m. local time in the hamlet of Gainford, about 50 miles (80 kilometers) from Edmonton. The entire community of roughly 100 people was evacuated.
And:
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The train, using DOT-111 railcars, was operated by a U.S. company, the Montreal, Maine & Atlantic Railway.In the first half of this year, U.S. railroads moved 178,000 carloads of crude oil. That's double the number during the same period last year and 33 times more than during the same period in 2009. The Railway Association of Canada estimates that as many as 140,000 carloads of crude oil will be shipped on Canada's tracks this year, up from 500 carloads in 2009.
Following the fatal Quebec derailment, Cynthia Quarterman, head of the Pipeline and Hazardous Materials Safety Administration, has said the U.S. agency expects to publish draft regulations requiring that DOT-111 railcars be retrofitted to address safety concerns. The agency's proposal is intended to fix a dangerous design flaw in the rail cars, which are used to haul oil and other hazardous liquids throughout North America.
As we look back upon the 1973 OPEC oil embargo, it's important to realize some of the major constraints that are coming to light after decades operating under a scarce resource outlook. Transporting oil by trains is one indicator of inadequate infrastructure and out-of-date policies with respect to the shale boom. It's also important to recognize that rail oil transportation will remain prevalent for the foreseeable future. Briefly, several thoughts:
Putting oil on rail cars does not require large new capital investments (as pipelines usually do) and it provides more flexibility to change shipping routes as the supply and demand outlook changes. As we've seen recently, it's relatively easy to buy oil tanker cars and ship oil from North Dakota to refineries in Canada or along the East Coast depending on market conditions.
Putting new rail cars on existing tracks does not require an environmental review - unlike building new pipelines. While most of the focus is on stopping construction of Keystone XL, railway safety and environmental reviews are largely under the radar.
Warren Buffet's purchase of Burlington Northern is looking pretty smart.
More on OPEC/infrastructure constraints to come.