American-based railway owner Omnitrax is in the testing phase of a new route to transport crude oil in Canada north via rail to Churchill, Manitoba then out to sea through the Hudson Bay. The glut of oil as a result of drilling in the Baaken Shale and tarsands production has sent companies scrambling in attempts to get the crude to market as quickly as possible once it’s above ground. The first trial run, which will cost about $2 million and occur in early October, will be the first of its kind taking Canadian crude to Europe and east coast refineries in the United States.
“Western Canadian crude has never moved to Rotterdam, and we think that competitively – and we’re talking about much smaller vessels than you would get out of Saudi Arabia, for example – we could serve that market,” said Mike Ogborn, an adviser to the board of Omnitrax.
Aside from the much maligned Keystone XL pipeline that hopes to bring oil south into the U.S., TransCanada has recently set in motion their $12 billion Energy East project to pipe tarsands oil across Canada to its east coast. While pipelines garner criticism from environmentalists because of leaks, shipping by rail has proven quite dangerous as well with the recent accident in Quebec. Consistently high energy prices despite the continued boom in U.S. oil and gas production make it safe to assume companies will keep attempting new methods to get oil to market.
Map of Canadian railways via railplus.com