Train derailment may boost west-east pipeline support

A fatal train derailment in Lac-Mgantic, Que. over the weekend has some people questioning whether oil should be transported by rail and may increase support for the proposed west-east pipeline, says an expert.

The train, carrying ashipment of crude oil destined for the Irving Oil Ltd. refinery in Saint John, derailed and exploded about 250 kilometres east of Montreal on Sunday, killing at least five people. About 50 people have been reported missing by family members.

"We would've seen a lot of problems no matter what had been in those cars," said Warren Mabee, the director of the Queen's Institute of Energy and Environmental Policy, in Kingston, Ontario.

"But the fact that it was oil and the fact that it was so flammable really led to this massive destruction. And people are going to question whether we should be doing that at all."

More oil moving by rail

In recent years, much of the oil that comes from the western provinces and is processed at the Irving Oil refinery inSaint John is delivered by train.

Since the company built a new rail terminal last year, the number of trains carrying oil into the city has more than doubled.

Saint John's situation is not unique. The amount of oil being shipped by rail has increased significantly in the past year, due in part to an increasein demand andthe fact there is no new pipeline capacity coming on line, said Mabee.

"I think that the number is now over half a million barrels a day aremoving by rail and that means that, you know, the likelihood of a problem, the likelihood of an incident like we just saw over the weekend starts to rise because you have so much more volume moving through the system," he said.

It may be time to look at the routes and the regulatory system, Mabee said.

May change perspectives

The derailment comes just days after the Alberta government signalled more support forthe proposed west-east pipeline to New Brunswick.

The Alberta Petroleum Marketing Commission, a Crown corporation, has pledged to move up to 100,000 barrels a day for 20 years on the proposed TransCanada Corp. pipeline a commitment worth about $5 billion.

"I think that the fact that this tragedy has taken place is going to put a lot of people's view set into a different place," said Mabee.

'I think there will be more support frankly for the pipeline options, which do not lead to this kind of death and destruction.' Warren Mabee, Queen's Institute of Energy and Environmental Policy

"They're goingto be thinking now more about public safety whereas up until the weekend we were really thinking about environmental safety and pipeline spills," he said.

"I think we'd kind of forgotten that this kind of an accident can take place. So people will now have that as a reference point andI think there will be more support frankly for the pipeline options, which do not lead to this kind of death and destruction."

The provincialgovernment has estimated the pipeline project has the possibility of creating 2,000 jobs during the construction phase and a few hundred refinery jobs afterward.

TransCanada officials havesaid if the bidding process phase proved successful, the company would start seeking regulatory approvals later in 2013 and the oil could start flowing to Eastern Canada by late 2017.

The company is expected to announce within weeks whether it plans to move ahead with the project.

The Irving Oil refinery in Saint John is the largest in Canada and can process 300,000 barrels of oil per day. Saint John also has a deep-water port and a liquefied natural gas facility.