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Keystone XL Pipeline Pushers Sorta Threaten to Rain Fire on Chicago, But Have Oil Train Issue Wrong

Josh Mogerman

Posted May 29, 2014 in Curbing Pollution, Moving Beyond Oil, Solving Global Warming

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PingTomParkTankerCars.jpg

You know, industry loves to say environmentalists use scare tactics all the time. But check out what is going on in the Keystone XL debate and you will see the pipeline pushers making claims that are designed to scare the pants off of the public. And, oddly, they cast themselves as both the boogieman and savior.

Look at what one of the biggest pipeline advocates out there had to say in the Financial Post recently. Gary Doer, Canada’s Ambassador to the US is quoted about the “consequences” of a delayed Keystone XL decision:

“Every day it’s delayed is another day where more oil is going to come down by rail,” Mr. Doer said. “We are going to continue to say to people: See those trains in Chicago? You see how much crude is going by your door? That is riskier for you and it’s because of the pipeline. It’s not an abstract debate. It has real consequences to your community.”

Yes…if you do not build our beloved pipeline, we will rain fire down on the Windy City in the form of giant combustible oil trains like the ones that incinerated the Canadian town of Lac Magantic and set a river on fire in Virginia last month.

It is a scary thought.

But…as is often the case with the oil industry talking points parroted by the folks politically advancing their agenda…its not really true.

While there has been an oil train boom, the oil riding the rails in America is almost exclusively the light sweet crude from the Bakken fields in the Dakotas. A recent report by Oil Change International shows that North Dakota crude accounts for about 80% of North America’s crude by rail boom. That is the stuff moving along train lines in Chicago. That is the stuff involved in numerous scary incidents around North America. Oil producers in Texas, Utah, Wyoming, Colorado, New Mexico, Oklahoma, Ohio and Kansas are also using rail to ship crude to refineries and have built about one million barrels per day (bpd) of on-loading terminals.

But Keystone XL is designed to move Canada’s super-carbon-heavy and sludgey tar sands oil. Pushing KXL through doesn’t make Chicago or any other rail hub city safe, because it offsets very little oil that would otherwise move by train. According to Reuters, tar sands by rail to the Gulf averaged less than 30,000 bpd in 2013.

Doer either doesn’t understand that there are different types of oil moving from different places, or he is intentionally using a cynical scare tactic. It’s typical of this debate, which had revolved around claims of the pipeline delivering huge numbers of jobs and energy security to the US. They did not stand up to scrutiny as research showed 50 permanent jobs and increased the pipeline’s oil being burned predominantly in foreign vehicles. So, they’ve shifted to this argument, which also doesn’t hold water. It is not just Doer. His boss, Prime Minister Harper has made similar claims.

But make no mistake, pipelines vs. oil trains is a false choice; the industry wants more of both. If we have concerns about the safety of moving oil on rails in this country, we should fix the trains which are largely unregulated, rather than foisting a pipeline that will largely move a completely different kind of oil (it’s worth noting that a half million barrels/day of pipeline capacity has been cancelled in the Dakotas due to lack of interest from oil producers).

Image: Tanker cars are a common site in Chicago. I photographed the ones above while taking my son sledding in Ping Tom Park just south of downtown a few months back.

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Comments

Michael BerndtsonMay 29 2014 10:53 AM

You are correct. O&G want to move Bakken light sweet crude to whomever wants it. There's a premium for that low sulfur, light and easy to refine stuff. The interested parties would be refiners without heavy crude processing capabilities (cokers). Rail gives them that extra market flexibility.

Sure Canada is building tar sands loading facilities in Edmonton that will make the UP Proviso Yard in Maywood, Il look like the model train set at the Museum of Science and Industry - but the hope is to move tar sands undiluted. Saving on transportation cost. Diluted tar sands for pipe flow adds about 30 percent to the total volume. O&G is looking into things like heated rail cars to keep the goo from getting too sticky and firm.

There's even feasibility level silliness of shipping tar sands more like a solid. I'm not sure if that idea got screened out as dumb or not.

Here's some neat info:

Rail emerging as long-term North American crude option
http://www.ogj.com/articles/print/volume-111/issue-8/transportation/rail-emerging-as-long-term-north-american.html

Canadian crude-by-rail exports leap 83% in fourth quarter
http://business.financialpost.com/2014/05/06/canadian-crude-by-rail-exports-leap-83-in-fourth-quarter/?__lsa=6d2d-0ac4

(Sorry about using the Chicago MS&I model train reference if you're a model railroader and sensitive about that kind of thing. Many of the hobbyists are.)

JakeMay 29 2014 01:29 PM

Funny how you try to turn this around and pretend like it's not your fault that the oil has to go by train. The oil needs to move. The oil industry would like to move it in the safest possible manner. You and other environmental groups force their hands. Don't act like it is the other way around.

My guess is you people are just now waking up to the reality of the consequences of your actions. How despicable to now try to pin the blame on somebody else. This is what you wanted to happen.

Josh MogermanMay 29 2014 01:33 PM

Jake, sorry, but I think you should look at the issue more closely. Two major pipeline projects in the Dakotas have been canceled in recent months totaling a half million barrels per day of capacity. They were canceled due to lack of interest, not environmental group pushback. The producers prefer the flexibility of oil trains to send to a variety of refiners out east. They are saying no to pipes in favor of doubling down on trains.

JakeMay 29 2014 04:03 PM

Josh, we're talking about that "evil" Canadian stuff, not Bakken. There is a huge difference between the two as the country has (or will have) a glut of light oil and a shortage of heavy.

Josh MogermanMay 29 2014 04:15 PM

Jake--

They are very different types of oil, and as a result the industry is moving them very differently. Bakken producers seem to prefer using trains over pipelines. Tar sands producers really need to use pipelines. So saying that a pipeline designed to carry mostly tar sands will somehow reduce risk associated with trains moving Bakken oil is simply incorrect. Or conversely, saying not approving KXL increases the likelihood of mishaps on the rails in Chicago is misdirected, at best. They are both oil-related, but the similarity stops there.

The public is concerned about safety issues associated with the increase in Bakken oil moving on the rails. My point is that we should address those issues directly, as opposed to the weak sauce thrown out there by KXL supporters who are trying to play on fears to push their largely unrelated project. If we want to fix risk from oil trains, let's fix risk from oil trains--not push a pipeline that doesn't address the problem.

JakeMay 29 2014 06:49 PM

Your article is about Keystone XL. Canadian oil will move by rail if it doesn't move by pipe. Movements of tar sands by rail are already growing by leaps and bounds due to delays in KXL.

A Proud CanadianMay 29 2014 08:26 PM

Hi Josh

You also forgot his first sentence “Every day it’s delayed is another day where more oil is going to come down by rail”. I think our ambassador, as a friend of the US, is trying to bring the conversation to a more visceral level. The logic of it is self-evident. Your hyperbolic paraphrasing doesn’t help (dare I say … use of scare tactics). Stick to facts and you will be much better off. At no time did he describe it as explosive. He meant from a spill point of view. However with this false interpretation, you leap to an evaluation of pipelines for light fracked crude, how Bakken producers are using rail, and how keystone won’t solve that.
The point is that increased bitumen by rail is coming due to increased production by Canada. And that is the rail traffic he is talking about. That is the traffic coming to Chicago.
It is obvious Doer and my government know exactly what is going on and you are purposefully twisting meaning, misdirecting, and then rambling.

Oh, and look at where more railcars are……. Here’s something I passed along to a fellow contributor on the site not long ago about the California oil industry:
“During the first three months of 2013, California imported slightly under 90,000 barrels of Canadian oil via train. From early January to the end of March this year, that figure topped 700,000 barrels, an increase of roughly 700% over just one year. For years the Bakersfield area has supplied its own horrendously carbon intensive heavy oil. But now they need more Canadian heavy or dilbit to replace local supply, Particularly now that the price justifies the rail transport costs to get it there.”
You should Contact Feinstein, Pelosi, Boxer, Waxman et al and let them know this. Demand that the California Heavy oil imports be halted and the California heavy oil production and refining industry be shut down”
I also added
“On second thought….. Do the Koch brothers own those cokers?….. probably not. Forget about it.”
Sorry I couldn’t resist the obvious political slant on this.

And in the comments both Jake and Michael have it right ……
And in Michael’s second link the article refers to 1.1Mbpd of loading capacity by year end out of western Canada. A completely predictable consequence of pipeline approval woes through to the USGC.
For Michael (In relation to bitumen and solid/liquid. I think that its just what happens to the viscosity of it as it leaves Northern Alberta -40degC and arrives in the USGC +25degC in the winter.
Also for reference …. tar sands is what is in the ground. The material in the rail car or pipeline is bitumen. When you refer to diluted tar sands it is confusing as it is really diluted bitumen. There are people out there that actually believe that tar sand is coming down the pipe so using that terminology isn’t really fair to them.)

Josh, you seem to be saying “Look, the market is speaking and rail cars are the transport method of choice for Bakken, so why do we need a pipelines? …. Follow the market”. Then I would point out that all refineries signed on for Keystone XL still patiently await delivery.

Let the Bakken rail. Let the oilsands pump.

Regards,
A Proud Canadian

Josh MogermanMay 30 2014 12:17 PM

@Jake, there has been an increase, but the amount of tar sands moving on the rails in the US is dwarfed by Bakken oil. And that is not going to change. Bitumen requires different, more expensive, heated cars and has other limitations that make rail difficult.

@AProudCanadian, thanks for commenting. Not going to go through point for point, but a few thoughts:

* it is essential you understand the conversation around oil trains in the US right now: its about derailments and fires. So intentionally or not, that is how most Americans will interpret Doer's remarks. Either way, threatening spills of Bakken oil rather than fires remains a cynical response because, again, that is the bulk of oil moving through Chicago on trains--Keystone XL whether built or not, does nothing to change that situation. The misdirection is not mine: the Ambassador is pointing to a very clear problem and prescribing a self-serving solution that does little to nothing to address the problem. It is a scare tactic.

* My point is that the industry and its apologists like to say "oil is oil" which is untrue and clear in this case. Its not pipelines OR rail. The industry wants more of BOTH but comments like Mr. Doer's obscure those realities with a false construct.

Josh MogermanMay 30 2014 12:21 PM

I'd point readers to this BusinessWeek story which follows many of the themes I outline in this post regarding the way KXL has been sold to the public: teeing off on a variety of claims, including "world's safest pipeline" which is looking laughable given the shoddy construction of southern portions already in the ground:

http://www.businessweek.com/articles/2014-05-30/the-real-reason-keystone-xl-might-fail#p2

A Proud CanadianMay 30 2014 04:57 PM

Hi Josh,
Thanks for the quick response.
I still believe that your assessment is incorrect. The Ambassador is indeed pointing to a very clear problem of increased bitumen by rail. The self serving portion was
“Yes…if you do not build our beloved pipeline, we will rain fire down on the Windy City in the form of giant combustible oil trains like the ones that incinerated the Canadian town of Lac Magantic and set a river on fire in Virginia last month.”
Too hyperbolic. So much so that it can’t convince the reasonably minded.

However I do agree with you that “oil is oil” is wrong. They can be very much different. For example, oil produced in North America is regulated, oversight within a democracy, supported by unions, and under governments that support human rights. Other oils, such as those that the oilsands would be replacing (Venezuelan and Saudi) is …. Well lets just say …… not that.
For me, as an environmentalist, is why I say yes to the Keystone pipeline and all other pipelines bringing Canadian oil to market. Let Saudi Princes and their friends keep their oil in the ground.

Although you won’t go through point by point….. what do you say about my last comment? Also I would like your opinion on shutting down the California heavy oil industry as well.

A Proud Canadian

A Proud CanadianMay 30 2014 04:59 PM

Hi Josh,
Read the article. This is a big red herring and not newsworthy.
What is happening is that end of construction deficiencies were identified and fixed as part of the normal turnover and commissioning process. This is common construction practice. Deficiencies are then rectified, pre startup safety review is conducted, and then the pipeline goes into operation.
Every article on this notes that all deficiencies were corrected pre-startup. Common.
Non technical environmentalists might jump at this though (especially with continued false assessments that you and others are providing ……..)

A Proud Canadian

JakeMay 31 2014 09:25 AM

Canadian,

Thanks for pointing out the irony of Josh's words. Maybe oil industry supporters wouldn't criticize radical environmentalists of using scare tactics if radical environmentalists would stop doing it.

How ironic that Josh's attack, claiming oil industry scare tactics, is actually a classic example of radical environmentalist scare tactics. I'm not sure if he thought his readers were too dumb to notice, or if he simply didn't take the time to think about what he was saying.

Josh has made a valiant attempt to defend himself, but I don't think he has succeeded.

josh MogermanMay 31 2014 11:17 AM

Guys, thanks for taking the time to comment on my blog. I am honored that you feel that this is a forum worth your time. That said, the effort to flip the script is crazy. Doer made a point that is demonstrably wrong: the oil he is pointing to riding the rails around Chicago is NOT the oil that will make up the bulk of what moves through KXL. Its a bogus, cynical talking point. It falls squarely in line with other pro-KXL talking points which have been proven false, like the ludicrous job numbers (which were ballooned into the hundreds of thousands). The pipeline is a good thing for the oil industry--which is why you are devoting so much energy to promoting it--but not for the American public which derives little benefit directly and an astounding amount of damage indirectly via enabling the unsustainable growth of tar sands production.

Y'all are welcome to keep tying yourselves up in knots saying that I am wrong here, but the more the American people learn about this boondoggle project, the less they like it. And the more messages that float across the border like Mr. Doer's threat of oil train issues in Chicago, the more pipeline proponents' rhetoric will be questioned.

JakeMay 31 2014 03:55 PM

Americans overwhelmingly support Kyestone XL even given its environmental concerns: http://www.washingtonpost.com/politics/2014/03/06/4fdc0caa-a592-11e3-a5fa-55f0c77bf39c_graphic.html

You seem to live in some sort of alternate reality.

A Proud CanadianJun 2 2014 10:41 PM

Hi Josh,

Instead of calling it a boondoggle project, why not use your response to answer:

I do agree with you that “oil is oil” is wrong. They can be very much different. For example, oil produced in North America is regulated, oversight within a democracy, supported by unions, and under governments that support human rights. Other oils, such as those that the oilsands would be replacing (Venezuelan and Saudi) is …. Well lets just say …… not that.
For me, as an environmentalist, is why I say yes to the Keystone pipeline and all other pipelines bringing Canadian oil to market. Let Saudi Princes and their friends keep their oil in the ground.

Although you won’t go through point by point….. what do you say about my last comment? Also I would like your opinion on shutting down the California heavy oil industry as well.

A Proud CanadianJun 4 2014 08:01 PM

Josh?

Josh MogermanJun 5 2014 12:26 PM

@APC--

Sorry, I've been focused on the rollout of landmark announcement of carbon pollution standards for power plants in the US--we are focused on an array of dirty fuels, not just tar sands.

As for your points, they sound pretty much like "Ethical Oil" talking points which have been roundly criticized in Canada. But to answer your question: Canada is the top oil supplier to the United States and the majority of the oil coming to my neck of the woods in the Upper Great Lakes is tar sands oil. As a consumer, I should have a voice in this, which I am excercising. As a Chicagoan, I should have a voice in the regulation of the refineries dumping in my drinking water source (Lake Michigan) and the modes of transport moving through my community, which I am excercising. Tar sands have a direct impact on my quality of life. That is not to diminish the broader impacts of oil more generally--from Canada, Mexico, or the Middle East. We are working on those issues too via international treaties and broader regulatory issues.

We need to move off of oil--no matter its source. That is going to take a while. But doubling down on the worst of the worst from a carbon perspective makes NO sense. We are addressing carbon in many forms in the US. Saying no to KXL makes perfect sense in that context--particularly as similar pipeline schemes are similarly mired in Canada.

A Proud CanadianJun 6 2014 09:59 PM

Josh,

You don't get it. Oilsands is not the worst of the worst (CO2-wise) and on many levels it is the best of the best.
Retreating to an argument that you are just concerned about your backyard is not worthy of this site. what about your nation?

And If you are going after all dirty fuels ..... I must have missed all of the articles, protests, and celebrity appearances at all of the Riyadh, Caracas, and Beijing events.

Josh Mogerman Jun 7 2014 10:58 AM

@APC. Sorry, but not even CAPP says tar sands is one if the best in CO2 terms. Their line is that it is comparable with the other heavy crises and concede it may be a tad more carbon intensive. The implication otherwise in your comments means that the comments have departed from reality. The negative issue associated with tar are multifaceted but carbon is chief among them. They cannot be ignored despite the "ethical oil" effort to brush them under the rug. We need to reduce oil consumption across the board.

Comments are closed for this post.

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