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Page added on November 22, 2018

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Canada Is Now A Land Of Oil Trains

Canada Is Now A Land Of Oil Trains thumbnail

Canada’s oil industry is facing record-low prices for its exports, a glaring lack of infrastructure to bring its product to market, and an uncertain long-term outlook.

But none of that is stopping the oil patch from increasing production. And as one pipeline project after another fails to launch, the industry is relying more heavily than ever to ship its oil by rail.

According to Statistics Canada, the volume of oil on Canada’s railroads has soared by 64.6 per cent in just the past year. And in the past seven years, the number of rail cars carrying oil across Canada has quadrupled.

HuffPost Canada
Oil-by-rail shipments in Canada reached a record high of nearly 20,000 rail cars in August this year. By volume, oil-by-rail is up by more than 64 per cent in the past year.

The spike in oil trains began around 2011, a few years before the July, 2013, disaster in which a 74-car oil train derailed in Lac-Megantic, Que., killing 47 people.

Besides the obvious risk to the environment and to human life, there is also the fact that oil producers are crowding out other industries that rely on rail.

This leads to “higher costs and shipping delays for other industries,” Bank of Montreal senior economist Sal Guatieri wrote in a client note Tuesday.

“Surging railway loadings of oil contrast with flat loadings for shipments of wheat, copper, machinery and many other products in recent years.”

And if you think these oil trains don’t come through your neighbourhood, that they’re somehow limited to Alberta, take a look at this map of the oil rail network in Canada, provided by the Canadian Association of Petroleum Producers:

Canadian Association of Petroleum Producers
A map of Canada’s oil-by-rail network and its connection to U.S. terminals.

This massive expansion of oil-by-rail took place even as oil prices remained relatively weak, Canadian oil exports particularly so. This is especially true today; North American oil prices have dropped by some 31 per cent since a peak in early October, and closed at around US$53 on Tuesday.

Canadian oil has been selling at an enormous discount to that, recently trading below $14 a barrel. The last time global oil prices were anywhere near that low would have been the late 1990s.

Watch: ‘Take advantage’ of low gas prices while you can, analyst says. Story continues below.

But it’s not just Canada that seems to be desperate to get as much of its oil out of the ground right now as possible.

“Saudi Arabia is pumping oil like never before, its output surging to a record 10.6 million barrels per day in October,” National Bank of Canada economist Krishen Rangasamy wrote in a client note Wednesday.

“Iraq’s output is also on the rise as production from the Kirkuk region comes back online. Those are more than offsetting declines in sanction-hit Iran.”

Not to mention, U.S. oil extraction has surged in recent years to the point it is now the world’s largest producer of crude.

Meanwhile, traders are losing faith in oil’s prospects as the global economy shows signs of weakening.

“The deceleration of world economic growth ─ as evidenced by ugly (third-quarter economic) results in places such as Japan and the Eurozone … has clearly hurt demand for oil,” Rangasamy wrote.

Amidst all this, some executives in Canada’s oil patch have called for the Alberta government to use its existing powers to limit the amount of oil being pumped. So far, the province hasn’t indicated it plans to follow that advice.

Hey, at least we get cheaper gas

But there is one benefit to consumers from crude producers’ race to the bottom of the oil deposit: Lower fuel prices.

“The free-fall on energy markets … helped force down pump prices across Canada by 2.1 cents a litre to $1.13, their lowest since October 2017,” analyst Dan McTeague of GasBuddy wrote this week.

“As pump prices now stand 5.6 cents a litre lower than on this same day last year, much of the credit can be given to the unexpected and likely temporary decline in oil prices, which could be subject to an upturn once OPEC and Russia agree to production curbs beginning in December.”

HuffPost



17 Comments on "Canada Is Now A Land Of Oil Trains"

  1. Harquebus on Thu, 22nd Nov 2018 3:25 pm 

    The declining EROEI roadshow continues.

  2. Cloggie on Thu, 22nd Nov 2018 5:14 pm 

    OT – now watching BBC Newsnight and Question Time, but what a total mess this Brexit is developing into. I have never seen anything in my life that is so unpredictable and disoriented. Despite what I said earlier today, a no-deal is still very possible.

  3. Mark on Thu, 22nd Nov 2018 5:54 pm 

    Canada will soon be a land of lots of flaming oil train accidents. Assuming the same lax safety enforcement that “murica” enjoys currently.

  4. Duncan Idaho on Thu, 22nd Nov 2018 6:26 pm 

    “Assuming the same lax safety enforcement that “murica” enjoys currently.”

    Our conservative friends have dismantled the safety net for rail—” flaming oil train accidents” are a good sign that government has been eliminated.
    It is a wonderful conservative world!

  5. Cloggie on Fri, 23rd Nov 2018 9:16 am 

    New proposal energy storage: “hydrogen powder” NaBH4

    https://deepresource.wordpress.com/2018/11/23/hydrogen-powder-nabh4/

    Roundtrip efficiency claimed to be near 100%. Almost too good to be true.

    The details (“report to the Dutch government”):

    http://www.h2-fuel.nl/wp-content/uploads/2016/11/H2Fuel-New-doc_UK_02-11-2016_def-V4.pdf

  6. I AM THE MOB on Fri, 23rd Nov 2018 9:43 am 

    Peak Oil & Drastic Oil Shortages Imminent, Says IEA
    https://cleantechnica.com/2018/11/22/peak-oil-drastic-oil-shortages-imminent-says-iea/

    Trump supporters can’t get enough of what is coming to them..

  7. Anonymous on Fri, 23rd Nov 2018 10:01 am 

    The new railcar regulations have made it a lot harder to ship crude, so even trains are not that useful. That oil in Canada is really stuck. They should have built that eastbound pipeline years ago.

  8. Cloggie on Fri, 23rd Nov 2018 10:26 am 

    Oil prices crashing below $60, with no end in sight (4% in one day, WTI even more than 6%):

    http://www.spiegel.de/wirtschaft/unternehmen/oelpreis-stuerzt-ab-zeitweise-minus-sieben-prozent-a-1240136.html

    But remember, “we are all going to eat our children”.

  9. Davy on Fri, 23rd Nov 2018 10:27 am 

    “Roundtrip efficiency claimed to be near 100%. Almost too good to be true.”

    Yeap, too good to be true especially when put into a holistic framework.

  10. Cloggie on Fri, 23rd Nov 2018 10:57 am 

    Yeap, too good to be true especially when put into a holistic framework.

    ???

    Davy hasn’t paid any attention, he just copy and pastes a triggering sentence to which he responds with some empty words (“holistic framework”).

    Davy’s presence here mainly consists of shooting down possible solutions. Davy is not interested in stinking solutions.

    He calls that “neutering”.

    “Can’t do spirit” in action.

  11. Antius on Fri, 23rd Nov 2018 11:00 am 

    “Oil prices crashing below $60, with no end in sight (4% in one day, WTI even more than 6%):

    But remember, “we are all going to eat our children”.”

    Crashing oil prices (along with other commodities like copper) are symptomatic of impending economic recession. Not good news. Perversely, it does not necessarily indicate abundance of supply, but rather a collapse in demand. It will make the energy transition harder to achieve.

  12. Antius on Fri, 23rd Nov 2018 11:10 am 

    Sodium borohydride:

    https://en.wikipedia.org/wiki/Sodium_borohydride

    Not a hydrogen source as such, but rather a carrier. You have to generate the hydrogen in the first place and then synthesise the borohydride from the hydrogen through a set of chemical reactions, involving precusors like metal hydrides. Maybe something that we could get to work, but not with 100% round trip efficiency by a long shot. In fact, this would be a lot less efficient energetically than simple compression. But it would be easier to store long term.

  13. I AM THE MOB on Fri, 23rd Nov 2018 11:13 am 

    Clogg

    You won’t be eating your children because you dont have any..Just like Hitler no womans wants to breed with a Nazi..Espesially a paranoid whack job one..

    This is the calm before the storm..

    Peak Oil & Drastic Oil Shortages Imminent, Says IEA
    https://cleantechnica.com/2018/11/22/peak-oil-drastic-oil-shortages-imminent-says-iea/

    There will be an oil shortage in the 2020’s, Goldman Sachs says
    https://www.cnbc.com/2018/11/09/goldman-sachs-there-will-be-an-oil-shortage-in-the-2020s.html

  14. Davy on Fri, 23rd Nov 2018 11:25 am 

    “Davy’s presence here mainly consists of shooting down possible solutions. Davy is not interested in stinking solutions.”

    I am here to protect the truth from extremist liberties with fantasy, exaggerations, and self-serving distortions. You and billy are the prime sources of these excesses. BTW, you are whining like a wounded animal.

  15. I AM THE MOB on Fri, 23rd Nov 2018 11:33 am 

    Clogg is a knuckle dragging buffoon..He will be the first to shit his paints when the collapse happens..

  16. Sissyfuss on Sat, 24th Nov 2018 8:22 pm 

    What if everyone is pumping out of their minds because they think it might be a stranded asset soon. The story of the midterms is that young progressive Democrats want action on the environment and a more equitable economic system. It will be hard to buy this generation off because all we have for them is debt upon debt upon debt. And secession will be impossible between the red and the blues. It will be a combination of the Civil War and the Great Depression. Predicament warning flags are everywhere. Fuck interesting.

  17. makati1 on Sat, 24th Nov 2018 9:31 pm 

    Sissyfuss, I agree. There is no easy solution to the problems in the US. I still think that this is all part of the elite’s plans to take down the US so the OWG can be formed. We shall see.

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