Stakeholders grapple with challenges of oil transportation

Posted on January 13, 2014 by Westwind Weekly

Alberta is oil country – there is little debate about that.

Much of what the province has accomplished in its recent history can be directly tied to the revenues we have extracted from that one industry. Certainly there is room to debate whether Albertans are receiving their fair share in terms of oil and gas royalties but in general terms, a large part of our revenue is based upon these non-renewable resources.

And as the industry develops and grows, and new techniques are used to extract resources from the ground, a very old mode of transportation is being leaned upon more and more to move that product to market. Shipping oil via rail is common practice, and is leading some to question the safety of that practice.

Last year’s rail disaster in Quebec, and a derailment last month in North Dakota, have left the public, and many municipalities which have shipments pass through their communities, a little nervous. Last week, reports surfaced concerning the flammable nature of oil taken from the Bakken oil formation in North Dakota, which extends into Saskatchewan, which has added fuel to the fire.

A task-force report has now also been handed in to the governments of British Columbia and Alberta to examine the idea of having oilsands crude ride the rails if proposed pipelines do not get the go-ahead.

Right in the task force’s terms of reference, rail transportation for oilsands products is touted as a viable alternative based on costs, as the possibility of rail stepping in to fill the void to deliver bitumen to the West Coast is also mentioned.

Critics have argued against the move, and mentioned moving oilsands products to the West Coast using one of the country’s historic modes of transportation, without a public oversight process similar to those which have surrounded the pipeline projects, would be problematic.

As municipalities also grapple with the issue of being informed, in a timely matter, about what is being shipped through their communities, the issue becomes even more complex. It also raises the age-old dilemma in this country, concerning building a value-added industry using our oilsands products, versus simply shipping them elsewhere to be refined.

Financially, however, finding cheap and effective ways to move our province’s products to market makes sense. Pipelines to the West Coast are another option on which the door has not closed. But balancing environmental risks must also be taken into consideration, risks those in Lethbridge are currently debating regarding potential drilling activity in west Lethbridge.

The oil and gas industry has contributed greatly over the years to Alberta’s economic prosperity. We slayed our debt and produced multiple surplus budgets as a result of favourable oil and gas prices. Alberta does need to find a way to continue to reap those benefits, but it all has to be accomplished in a prudent manner, and not by putting Albertans, or those in British Columbia, at unacceptable levels of risk.