President Obama may never allow the Keystone XL pipeline to be built. But that’s not stopping Canada from moving oil to the United States and Asia.
“Since July, plans have been announced for three large loading terminals in western Canada with the combined capacity of 350,000 barrels a day — equivalent to roughly 40 percent of the capacity of the proposed Keystone XL pipeline that is designed to bring oil from western Alberta to refineries along the Gulf Coast. Over all, Canada is poised to quadruple its rail-loading capacity over the next few years to as much as 900,000 barrels a day, up from 180,000 today,” according to a report by the New York Time.
If all planned terminals are built, Canada can increase exports to the U.S. by more than 20 percent.
Shipping by rail usually adds about $5 per barrel. “But oil companies have decided that they cannot afford to wait,” the Times said.
Crude oil rail shipments jumped from 9,500 carloads in 2008 to 234,000 carloads last year, according to the Association of American Railroads.
Canadian National Railway said moving crude oil by rail is one of its fastest growing businesses — despite increasing questions about rail safety, especially in the wake of a deadly crash in Quebec last July, when an oil train derailed, killing dozens of people, according to NPR.
Canada-based Cenovus Energy is planning to increase rail shipments from 7,000 barrels a day to as many as 30,000 barrels a day by the end of 2014.
Asia is also an export target for Canadian hydrocarbons.
“We want to diversify our markets beyond just moving our product south,” Peter Symons, a spokesman for Statoil told the New York times. Statoil has agreed to lease two Canadian oil loading terminals. “We can get that product on a ship and get it to premium markets in Asia,” Symons said.
Refiners and port operators in the states of Washington and Oregon are turning to rail projects to move Canadian heavy crude and North Dakota’s light crude.
Texas refiner Tesoro and the oil services company Savage have announced a joint venture to build a $100 million, 42-acre oil-handling plant in the Port of Vancouver on the Columbia River that could handle 380,000 barrels of oil each day if permits are granted, the NYT said.