NEW YORK Pipeline projects such as TransCanada Corp.s Keystone XL have encountered delays because of environmental concerns, but that has had the unintended effect of pushing oil producers towards rail, a less environmentally friendly option, according to a top company executive.
"The facts are pretty simple: For every mile you move a barrel of oil by rail, you emit three times the GHGs (greenhouse gases) than you do by moving it by pipeline, and you have an order of magnitude higher risk of having some sort of incident, leak or spill," said TransCanadas president of energy and oil pipelines, Alex Pourbaix. "If youre actually concerned about the environment, for long-haul movement of oil you very much want to see that moving by pipeline."
Pourbaix made his remarks at the East Coast Energy Conference in New York presented by Calgary, Alberta-based FirstEnergy Capital Corp. and Paris-based Société Générale SA.
"The (Alberta) oil sands are going to get developed one way or another," he said. "I think it would be a real shame for everyone involved if the majority of that oil were to move by rail, because I really dont think its an environmental benefit and its certainly not in the interest of the economy."
Transport by rail costs about two to three times as much as transport by pipeline, according to Pourbaix, and the construction of pipelines also has economic benefits.
The State Department recently released the draft supplemental environmental impact statement (DSEIS) for the Keystone XL pipelines proposed new route (amm.com, March 4). Construction of the pipeline could generate as many as 42,100 jobs and $2.05 billion in domestic earnings, according to the DSEIS summary.
Calgary, Alberta-based TransCanada currently has about $25 billion worth of projects under development and expects growth to come mainly from oil pipelines. "I wouldnt be surprised if that number is several billion dollars higher a year from now on the oil side," Pourbaix said.