Growing rail transport of oil increases environmental threat in US, Canada

The deadly destruction visited on a Quebec town when a runaway tanker train exploded highlights the challenges of transporting oil by rail rather than pipelines.

The construction of new pipelines has been unable to keep up with surging North American oil production, in part due to regulatory delays over concerns raised by environmental activists, so a lot of oil is shipped by rail.

For energy producers rail is a last resort to get oil to refineries for processing and to markets.

According to the Canadian Railway Association, oil shipments jumped from 500 cars in 2009 to 140,000 this year, while environmental activists stepped up their fight to block approvals for new pipelines across Canada and the US. Some 234,000 trains carrying oil, a more than tenfold increase over the same period, crisscrossed the US last year, according to the Association of American Railroads.

Derailments are down 20 per cent year on year, according to the transport ministry, and the amount of oil shipped by rail remains less than 2 per cent of all transported crude in Canada, and 10 per cent in the US. But spills and disasters like Lac-Megantic suggest it is too much.

"This is the worst accident in the history of transporting crude by rail," an analyst with Desjardins credit union said.