“The reality is that nobody likes pipelines in their backyard,” says economist Jeff Rubins. “When we imported oil, moving it was somebody else’s problem. There are oil spills every day in the Niger Delta, but we don’t care. Out of sight, out of mind. Moving oil around the world is a messy business that we’ve never had to deal with. But now that we are, we don’t like it.”
While it’s more costly and riskier to move oil by rail than by pipeline, crude-by-rail has become the oil industry’s de facto plan B in the absence of sufficient pipeline infrastructure to handle surging production from North Dakota and Alberta’s tar sands. Rubins expects to see the volume of oil-by-rail movement in Canada skyrocket from about 200,000 to 900,000 barrels per day.
“But what’s going to happen is, one of these days an explosion is going to happen in Chicago or Toronto, which are areas that get lots of oil passing through by rail. The train that blew up in Lac-Mégantic went through Toronto, in fact.”