Keystone XL backers bolstered by oil train risk report

A government warning about the dangers of increased use of trains to transport crude oil is giving a boost to supporters of the long-delayed Keystone XL pipeline.

U.S. and Canadian accident investigators urged their governments Thursday to impose new safety rules on so-called oil trains, warning that a "major loss of life" could result from an accident involving the increasing use of trains to transport large amounts of crude oil.

Pipeline supporters said the unusual joint warning by the U.S. National Transportation Safety Board and the Transportation Safety Board of Canada highlights the need for Keystone XL, which would carry oil derived from tar sands in western Canada to refineries on the U.S. Gulf Coast. Oil started flowing Wednesday through a southern leg of the pipeline from Oklahoma to the Houston region.

Sen. John Hoeven, R-N.D., said the yearslong review of Keystone has forced oil companies to look for alternatives to transport oil from the booming Bakken region of North Dakota and Montana to refineries in the U.S. and Canada. A planned spur connecting Keystone to the Bakken region would carry as much as 100,000 barrels of oil a day.

"Clearly because this project has been held up, that is creating more (oil) traffic by rail," Hoeven said Thursday. "Those companies are being forced to deliver their product by rail because they don't have the pipelines."

A pipeline opponent said Hoeven's argument is based on a false choice between moving oil by rail or pipeline.

"It's disingenuous for supporters of Keystone XL to suggest that if we build Keystone, we won't have safety risks posed by crude-by-rail, and if we don't built the pipeline we will" have those risks, said Anthony Swift, an attorney for the Natural Resources Defense Council who has studied the Canadian tar sands.

Shipment of oil by train is likely to continue, whether or not Keystone XL is approved, Swift and others said, as companies seek to capitalize on an oil boom that has pushed North Dakota to become the second-largest oil producing state after Texas.

Both rail and pipelines have good overall safety records, although several high-profile accidents involving crude oil shipments _ including a fiery explosion in North Dakota last month and an explosion that killed 47 people in Canada last year _ have raised alarms.

Spills from rail cars occur more frequently than from pipelines but tend to be smaller. Pipelines also can be built to avoid population centers and fragile ecosystems, while crude-carrying trains frequently travel through large cities such as Detroit and Philadelphia.

Chicago Mayor Rahm Emanuel on Thursday called for new steps to protect communities from accidents involving oil trains and other hazardous materials, including fees on companies that ship crude oil by rail and on industries that use oil.

The money would go into a fund to rebuild rail lines, Emanuel told a meeting of the U.S. Conference of Mayors in Washington. Chicago is a major freight rail hub. Emanuel's proposal was endorsed by the mayors of Philadelphia, Madison and Milwaukee, Wis., Kansas City, Kan., and Peoria, Ill.

Rail industry officials bristled at the notion of a tax on their customers.

"Freight railroads each year invest roughly $25 billion of their own funds into the nationwide rail network so taxpayers don't have to, and the result is rail infrastructure that is the envy of the world," said Edward Hamberger, president of the Association of American Railroads. "As we've seen with other federal tax and fee proposals, the end result is unfortunately that consumers often end up footing the bill."

Most of the crude currently being moved by rail is light crude from the Bakken region, not heavy tar sands oil from Canada, said Swift of the Natural Resources Defense Council. Oil from tar sands is heavier and more expensive to move by rail, Swift said, making trains less desirable than pipelines for such oil. By contrast, energy companies in the Bakken region embrace rail, since it is more flexible than pipelines. North Dakota produces nearly a million barrels of oil a day, a majority of it shipped by rail.

"Expansion of tar sands depends very much" on Keystone's approval, Swift said.

A spokesman for Calgary-based TransCanada, which has been seeking approval for Keystone XL since 2008, said it is in everyone's interest to ensure that oil shipments are as safe as possible _ whatever the method.

TransCanada has agreed to implement 57 voluntary safety measures for Keystone XL in a bid to convince U.S. officials that the pipeline is a good risk.

"As we have said before, pipelines and rail continue to be complementary parts of the transportation equation, and the facts show that it is much safer to move large volumes of products, like oil, longer distances by pipeline," said Shawn Howard, a company spokesman.

TransCanada chief executive Russ Girling said last week that if the Obama administration doesn't approve the pipeline, his company will look to build rail terminals in Alberta and Oklahoma. Girling called pipelines "by far a safer alternative" to oil trains, but said if customers want him to build rail terminals, he will.