Deadly derailment won't stop oil on trains

NEW YORK (AP) A fiery and fatal train derailment earlier this month in Quebec, near the Maine border, highlighted the danger of moving oil by rail. But while the practice could be made safer, it won't be stopped in its tracks.

This year, more trains carrying crude will chug across North America than ever before nearly 1,400 carloads a day. In 2009, there were just 31 carloads a day.

U.S. and Canadian drillers are producing oil faster than new pipelines can be built. As a result, trains have become an unexpected yet vital way to move this bounty of energy from the continent's midsection to refineries along the coasts. Not since the dawn of the petroleum age, when John D. Rockefeller clashed with railroad barons, have trains been so important to the oil market.

Since the July 6 tragedy in Lac-Megantic, where a runaway train carrying 72 carloads of crude derailed and killed 50 people, there have been calls for tougher regulations, stronger rail cars and more pipelines.

But experts say the oil industry's growing reliance on trains won't be derailed anytime soon. There's just no other way to get vast amounts of oil from North Dakota and Rocky Mountain states to refineries along the coasts, which are eager for cheaper, homegrown alternatives to imports brought in by boat.

"Stopping crude by rail would be tantamount to stopping oil production in a lot of the places it is now being produced," says Michael Levi, who heads the Council on Foreign Relations' program on energy security and climate change.

Even safety experts worried about the dangers of shipping oil by rail acknowledge that the safety record of railroads is good and improving. The scope of the Lac-Megantic disaster, which is still under investigation, appears to have been the result of uniquely bad circumstances, these experts say.

"Rail is going to remain a significant part of the way we move crude around the country for a long time," says Jason Bordoff, head of Columbia University's center on global energy policy. "I don't think this rail accident will significantly change that."

In the first half of this year, U.S. railroads moved 178,000 carloads of crude oil. That's double the number of the same period last year and 33 times more than the same period of 2009. The Railway Association of Canada estimates that as many as 140,000 carloads of crude oil will be shipped on Canada's tracks this year, up from 500 carloads in 2009.

Last year, 663 rail cars carrying hazardous materials derailed or were damaged in the U.S., a decline of 38 percent from 1,072 incidents in 2003, according to the Federal Railroad Administration. That's comparable to the total number of train accidents per million miles traveled, which fell 43 percent over the same period, and the number of derailments, which fell 40 percent.

Whether crude traffic on the rails will continue to grow quickly depends on oil prices around the globe, but refineries are gearing up for more.

Just across the Hudson River from New York City, Phillips 66 is building a terminal for its Bayway refinery that will be able to handle up to 100 rail cars or roughly 70,000 barrels of crude per day.

Across the continent, in Ferndale, Washington, BP is building a 2-mile (3-kilometer) rail loop to do the same. And in Vancouver, Tesoro is building a facility that will be able to unload 170 rail cars a day.

Refineries in Louisiana, Pennsylvania, Delaware, California and Oregon have projects completed or underway that allow them to accept rail shipments of crude, too. That means the oil, mostly from North Dakota, is crossing all of the states in between. (The train that derailed in Lac-Megantic was North Dakota oil destined for an Irving Oil refinery in St. John, New Brunswick.)

A Tesoro refinery in Anacortes, Washington, 80 miles (130 kilometers) north of Seattle, relies heavily on rail to get crude and a Shell refinery there is getting ready to do the same. Mayor Dean Maxwell said the city's fire department will study the Lac-Megantic accident in an effort to be more prepared. But he considers rail safe and efficient and says the increased train traffic hasn't impacted his community. He's far more worried about other things, like hazardous material traveling on highways.

"We have two refineries within six miles of our downtown," he says. "They're not making ice cream."

While crude transport by rail has grown quickly, it is still a relatively small part of train traffic and the crude trade.

Just 1.4 percent of U.S. rail traffic in the first half of this year was crude oil, according to the Association of American Railroads, an industry group. Pipelines and tankers remain by far the most important way to move crude. Railroads and trucks together supplied just 3 percent of the crude oil that arrived at refineries last year, according to the Energy Department.

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Follow Jonathan Fahey on Twitter at http://twitter.com/JonathanFahey .

This story has been automatically published from the Associated Press wire which uses US spellings

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