More oil on the tracks: Trains transport a ton of crude

Wreckage continues to burn on July 7, 2013 after a freight train loaded with oil derailed July 6 in Lac-Megantic in Canada's Quebec province, sparking explosions that engulfed about 30 buildings in a wall of fire.

This weekend’s deadly train derailment in Quebec spilled dozens of cars full of oil, killing several people and leaving many more missing. These types of oil trains are becoming increasingly common in North America, carrying crude from the middle of the U.S. to refineries on the coasts.

For most of U.S. history, oil refineries were built on the nation’s coasts. They were also near the major oil fields. But now, the oil boom in the upper Great Plains and Canada is changing all that.

Sarah Emerson is president of the research and forecasting firm Energy Security Analysis.

“The crude oil is up in North Dakota, and you have to get it to those same refineries which are still on the coasts,” she says.

The boom in oil production made possible by hydraulic fracturing -- or “fracking” -- has led to a spike in trainloads carrying oil. Stephen Schork edits the Schork Report, a daily look at energy markets. Instead of train cars filled with coal snaking along the nation’s railroads, he says these days, it’s all about crude.

“We’re really into uncharted waters at this point,” he says.

Schork notes that five years ago, U.S. railroads pulled fewer than 10,000 carloads of crude oil. That number is up to more than 233,000 carloads in 2012, according to the Association of American Railroads.

Pipelines are another option -- but there’s not enough capacity. And major projects like the Keystone XL have bumped into public resistance. After all, pipelines can burst, too. So for now, that means a lot of crude oil moving to the Gulf Coast, the East Coast, and in this case, the eastern coast of Canada, by rail.

Emerson compares the train derailment in Quebec to the Deepwater Horizon spill in the Gulf of Mexico in 2010. “It’s so big and so dramatic that it’s going to make everyone stop and say, ‘Well, wait a second -- should we be regulating this more closely?'”

So, Emerson warns -- get ready for intensifying debate over pipelines versus trains.

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