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Can Tar Sands by Rail Substitute for Keystone XL? Myth vs. Fact.

2 min. read

One of the key debates over the Keystone XL tar sands pipeline is whether rail can be an effective substitute/equivalent for pipelines. If, for instance, rail cannot substitute for Keystone XL, then pipeline supporters and opponents alike can plausibly argue that deep-sixing Keystone XL might significantly slow the expansion of Canadian tar sands production. If, on the other hand, rail can substitute for Keystone XL, then whether or not this project is approved might ultimately not have much impact on how rapidly the tar sands are developed.

So, is rail a plausible substitute for Keystone XL to transport 800,000 barrels per day of Canadian tar sands oil to U.S. Gulf Coast refineries? Here are two takes, the first mostly fact-free and the second fact-filled.

First, the largely fact-free myth.

While supporters and opponents of the Keystone XL pipeline have been busy debating the controversial proposal, the oil that it’s intended to move has found another carrier - one that didn’t require the president’s stamp of approval or several years and billions of dollars to construct.

Keystone’s friends and foes alike may have underestimated the North American rail system’s ability to handle the thick, gritty oil from western Canada known as tar sands. And while rail was originally a stopgap solution to the lack of a pipeline, oil producers have discovered its advantages.

Now, transportation and energy experts on both sides of the border believe that Canadian crude shipments by rail will continue to increase, whether the pipeline is ultimately approved and built or not....

Sounds like rail can do the job, right?  Well, sure -- until you look at the actual facts of the matter. Here's the reality.

Far less Canadian oil sands crude reached the Gulf Coast by rail last year than the U.S. State Department had been expecting, according to data that could flavor the final stages of the Keystone XL pipeline debate.

In January, the State Department concluded that practically nothing would hamper development of the Canadian oil sands since energy companies could easily move the fuel by rail if TransCanada Corp's pipeline was rejected...

...The data, which details individual deliveries, indicates that monthly oil arrivals by rail were often below 30,000 bpd early last year and then rose unevenly...

In order to match the more than 800,000 bpd capacity of the proposed Keystone pipeline, oil sands operators would need to put more than 13 mile-long trains laden with crude oil onto the tracks towards the Gulf Coast, every day.

The feasibility of such a plan weighs on the pipeline debate, which is now well into its sixth year.

And the correct answer is: shipping Canadian tar sands oil by rail is not a substitute for Keystone XL. Unless, of course, you think that "13 mile-long trains laden with crude oil onto the tracks towards the Gulf Coast, every day" constitutes a plausible - let alone safe for the environment and for communities located near the rail lines - scenario. If rail can't substitute for Keystone XL, it means that stopping this pipeline actually could put a significant damper on development of tar sands reserves. No wonder why Canadian oil interests - and the politicians who love them - are pushing so hard for U.S. government approval of this dirty tar sands line through the heart of America.