A controversial decision by the U.S. Army Corps of Engineers preventing completion of the Dakota Access Pipeline continues to spur debate about U.S. infrastructure projects and the movement of crude oil. Regardless of the outcome of that debate, in the short term railroads will continue to transport Bakken crude oil in specially designed tank cars.
A little less than one-third of total Bakken oil production moved by rail this past fall, although the transportation of crude by rail is down 51 percent from one year to the next. For the foreseeable future railroads will continue to transport crude oil, helping America achieve energy independence.
Dakota Access Pipeline
That’s good news for communities and first responders — because freight rail is exceedingly safe.
Value Partners Asia ex-Japan Equity Fund has delivered a 60.7% return since its inception three years ago. In comparison, the MSCI All Counties Asia (ex-Japan) index has returned just 34% over the same period. The fund, which targets what it calls the best-in-class companies in "growth-like" areas of the market, such as information technology and Read More
In the discussion over Bakken crude oil and how best to transport U.S. energy supplies, critics are lobbing inaccuracies about and mischaracterizing the safety of transporting crude oil by rail.
Here is the ground truth: Railroads have a tremendous safety record for moving all hazardous materials, including crude oil. In fact, 99.99 percent of all crude shipments by rail reach their destination with well under 1 percent (0.37 percent) of all derailments involving crude oil.
Railroads continuously work to improve hazmat safety. They have been at the forefront of requiring safer tank cars, are providing advanced training to emergency responders and employees, and have enhanced the sharing of information with emergency responders and government officials.
“In 2015 alone, 1,795 first responders took the three-day class at Pueblo (Colorado) and experienced derailed cars firsthand,” writes Mike Cook, executive director of Hazardous Materials Compliance and Training at the Transportation Technology Center Inc. “More than 800 students registered for the free online training course in 2015, which provides crude-by-rail basics for those who can’t travel to Pueblo. All the while, railroad companies continue to work directly with communities and first responders as well, effectively supplementing the work of these training programs and broadening the educational outreach to some 20,000 additional first responders.”
Notably, the rail hazmat accident rate has decreased 58 percent over the last 10 years.
The safety record is underscored by how effective freight railroads are in containing the rare spill. About 85 percent of all reported railroad spills by rail involve less than five gallons. For example, the average size of a pipeline crude-oil spill between 2002 and 2012 (excluding spills less than five gallons) was 11,170 gallons, or 266 barrels. As Reuters recently reported, oil spills occur more frequently with pipelines than rail cars. Citing data from the federal Pipeline and Hazardous Materials Administration, it found that 252 pipeline spills were reported last year to PHMSA involving crude oil, versus 123 for the rail industry.
Recent market conditions have dramatically reduced the price of crude and the demand for transportation. At present, freight railroads are shipping about half as much crude as in 2015, less than 1 percent of all rail traffic. That is likely to change, however, as a result of the North Dakota pipeline decision and as crude prices recover.
Pipelines and freight rail may compete for moving oil, but both are safe modes of transportation.
As Association of Oil Pipe Lines CEO Andrew J. Black wrote alongside Association of American Railroads CEO Edward R. Hamberger, “Both railroads and pipelines transport crude oil safely and reliably, and each has a role to play enhancing our energy security and delivering energy to American families and businesses.”
The argument over which is safer for transporting crude is a specious one — if the United States is to achieve energy independence, the nation will require both.
Article by Michael J. Rush, Inside Sources