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Image: Quebec Disaster Fuels Concerns About Oil-by-Rail Transport

Quebec Disaster Fuels Concerns About Oil-by-Rail Transport

Monday, 08 Jul 2013 10:56 AM

By Lisa Barron

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Saturday's deadly explosion in Quebec of a train carrying crude oil is expected to bring fresh scrutiny to the dramatic growth in North America of shipping oil by rail, according to The Wall Street Journal.

At least five people were killed and 40 remain missing after a runaway train carrying some 50,000 barrels of North Dakota crude derailed and exploded in the town of Lac-Megantic.

It was the latest in a series of high-profile accidents involving crude traffic on North America's rail network, where oil shipments reportedly have more than doubled since 2011 because of a surge in production.

"The frequency of the number of incidents that have occurred raises legitimate questions that the industry and government need to look at," Jim Hall, managing partner of consultants Hall & Associates and a former chairman of the National Transportation Safety Board, told Reuters.

"The issue here is: Are they expanding too rapidly? Are they in a rush to accommodate and to make the economic advantage of carrying these?"

Oil companies traditionally have favored pipelines, which have lower shipping costs and are less prone to leaks and spills. But oil production is outpacing pipeline construction, and there is uncertainty over several big pipeline projects, including TransCanada's Keystone XL, which would connect Western Canada's oil sands development to the U.S. Gulf Coast.

The $5.3 billion project is awaiting approval from President Barack Obama, who said last month that his decision later this year ultimately would depend on the pipeline's impact on carbon-dioxide emissions and the environment.

Meanwhile, rail-industry officials maintain that the number of oil spills still is small compared to the amount of crude shipped.

"In the past decade, 95 percent of rail incidents involving crude oil were ... non-accident releases, and 70 percent of those incidents involved spills of less than 5 gallons," Holly Arthur, a spokeswoman for the Association of American Railroads, told The Wall Street Journal.

It may be too soon to determine whether the Quebec disaster will affect the rampant growth in crude transport by rail.

"We need all forms of transportation for oil, whether they're rail, whether they're pipeline," Charles Drevna, president of American Fuel and Petrochemical Manufacturers, told Reuters. "No system is failsafe."

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