Tuesday, July 8, 2014

Curtailing the Transport of Oil by Pipe and Rail

There are a host of benefits associated with decreasing the amount of oil transported by rail. This will not only prevent deaths, injuries and environmental contamination, it will also reduce the amount of oil that makes it to market, which will in turn minimize emissions and drive up the price. Pipelines are the cheapest way to move oil. The cost of moving oil by pipeline is estimated to be between $5 to $10 per barrel of oil compared to $10 to $20 per barrel by train.

Rail industry regulations on the transport of fossil fuels will go a long way to help minimize dangerous accidents. They also have the ancillary benefit of driving up the price of oil which will increase the relative value of renewable sources of energy.

Maximilian Auffhammer, a University of California Berkeley economist estimates that in if no new pipelines are built up to ten billion barrels of tar sands oil will stay under ground.

"If no pipelines get built within and out of Canada and one has to rely on this rail scenario, capacity would run out this year and roughly 10 billion barrels stay in the ground," Auffhammer says. "Not building Keystone XL would make the rail capacity constraint binding and therefore lead to slower extraction even in the short run."

Serious climate action precludes oil pipelines, particularly those that would transport tar sands bitumen. Pipelines can move vast quantities of oil while there are limits to how much oil can be moved by rail.

© 2014, Richard Matthews. All rights reserved.

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