The Cost of Using Rail Instead of Pipelines to Move Oil

As I briefly mentioned in a recent post about the burgeoning rail industry, oil from the Bakken Shale in North Dakota is largely transported by rail. According to a Bloomberg story, we should be using pipelines as much as possible if we want to prevent spills, especially with the soon to be decided Keystone XL pipeline.

The March 29 rupture of an Exxon Mobil Corp (XOM). oil pipeline in Mayflower, Arkansas, provided the latest evidence for opponents citing the risk of environmental contamination in their efforts to scuttle the Keystone XL project, an almost 2,000-mile pipeline linking Alberta’s oil sands with the world’s largest refining market on the U.S. Gulf Coast. The alternative, hauling crude by rail, may be worse, said Charles Ebinger, director of the Brookings Institution’s energy security initiative.

A U.S. denial of Keystone XL this year would “undoubtedly” result in more oil spills by trains, Ebinger said in a phone interview. Trains’ higher accident rate comes mainly from leaking rail car equipment, spill records show.

“The evidence is so overwhelming that railroads are far less safe than pipelines, that it would be a serious mistake to use these recent spills to say that Keystone is unsafe,” he said.