Catherine Ngai of Reuters writes a second update to her article entitled UPDATE 2-TransCanada eyes shipping oil by rail amid Keystone XL delays-CEO. TransCanada Corp's Chief Executive Russ Girling confirmed "from Hardisty in Canada, the main storage and pipeline hub, to Steele City, Nebraska, where it would flow into an existing pipeline to the Gulf refining hub," as an alternative to the Keystone XL pipeline which has been delayed for five years in political roadblocks. This would be a more costly option.
TransCanada has waited more than five years for the Obama administration to make a decision on the $5.4 billion project, which would carry up to 830,000 barrels per day of crude from the oil sands of northern Alberta to the U.S. Gulf Coast.
Canadian crude-by-rail exports jumped to 146,047 bpd in the last quarter of 2013, an 83-percent year-on-year surge, according to the National Energy Board.
Jarrett Zielinski, chief executive officer of TORQ Transloading, which is building Canada's largest unit train terminal in Kerrobert, Saskatchewan, said TransCanada would need to load at least roughly nine unit trains per day to rival the takeaway capacity of Keystone XL, if they were to load raw bitumen.
This is the first I've heard about this. Such an enormous increase in train volume would raise additional issues, including those of safety, and capacity that would have to be considered. Is the the U.S. train infrastructure does not seem sufficient to meet such an increased demand?
A few months ago I heard a report on NPR of a crises in New York state for passenger trains there where certain train lines are regularly running 12 to 13 hours late due to contract priorities with the train lines giving commercial customers priorities and coal companies have increased use of deliveries so the commercial train companies who have the contracts to provide the trains for rail service have the right to allocate available trains on a priority basis to commercial customers.
The passenger train director for that area, and I am sorry I can not remember which train line it was, was highly distressed because obviously with 12 hour delays no one can rely on such a train so it is killing business on that line.
It could also be possible that this announcement is some kind of strategic posturing. For example, perhaps TransCanada's CEO is trying to alarm those with a commercial interest in the pipeline that he is considering bailing out so they will in tern raise pressure on President Obama and Democrats to by-pass delays?
10:25 PM PT: If you enjoyed this post please check out some of these other posts I've written today or late last night.
