Oil-by-rail remains best alternative

July 29, 2013 at 7:52 AM

HOUSTON, July 29 (UPI) -- There's no way to cut back on the amount of crude oil traveling by rail without additional pipeline capacity, a Houston energy analyst said.

Derailments of trains carrying crude oil have raised concerns about the transit option. At least 40 people were killed in Lac-Megantic, Quebec, in the early July derailment of a train carrying crude oil from North Dakota to Canadian refineries.

Skip York, an analyst at energy research company Wood Mackenzie, said rail is the best option apart from conventional pipelines.

"As long as I have more volume than pipeline capacity, I'm going to have to put it on a train and get it out," he said in an interview published Monday by the Houston Chronicle's Fuel Fix energy blog. "It's difficult to see how you could completely abandon the rail option at this point and going forward."

Advocates of pipeline transit say it's the safest and cheapest way to deliver oil to refineries. Spill volumes, however, are far less with rail accidents compared to pipeline incidents.

The Association of American Railroads said petroleum and petroleum product shipments by rail in the United States were up 28 percent for the week that ended July 20. Total rail traffic in the United States for the week was down 3 percent year-on-year.

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