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To Avoid Horrific Rail Disasters We Need More Pipelines

In the wee hours of July 6, 2013, a freight train derailed. The accident sent several cars hurtling downhill into the small Quebec town of Lac-Mégantic, close to the American border.

The train was full of crude oil, and the cars, without any brakes or engine power, went smashing into the center of town. The ensuing explosion leveled Lac-Mégantic's homey, lakefront downtown. Thirty buildings were destroyed.

Fifteen are known dead as of now, with another forty still missing. The town's library and archives, containing the town's most important historical documents, are gone. Its economic lifeline is now badly frayed, hit by a runaway freight train.

The Sûreté du Québec, the provincial police, have already begun a criminal investigation to determine the reason why the oil tankers were decoupled from the engine, and why the brakes on those cars failed.

The authorities will discover the immediate reasons for the crash in the fullness of time, there's little doubt.

But it's what those cars were carrying that bears more scrutiny.

It was oil.

The cars were carrying hundreds of thousands of gallons of crude oil, from the Bakken formation in North Dakota.

The Bakken oil has been a boon to the Midwest, bringing jobs and development. The oil is so plentiful that it will go a long way toward making the United States, finally and forever, free of its addiction to Middle Eastern oil.

As we've reported before, oil is coming out of the Bakken so fast – 242 million barrels in 2012 alone – that a large series of bottlenecks have developed in the race to get the oil from North Dakota to refiners and consumers.

Oil transit bottlenecks have developed at numerous points around the country, most recently in Oklahoma.

There's plenty of oil to be had, it's just a question of actually getting it around the country that's become the problem.

In the absence of pipelines, trains are the only feasible way to do this.

In the rush to use the Bakken oil an accident like Lac- Mégantic was only a matter of time. In fact, as horrible as the loss of life and property is, we may have been lucky it wasn't any worse.

Pipelines aren't a perfect solution. As we've seen with the lively debate over KeystoneXL, there are pros and cons. They're far from a perfect solution.

But so long as we continue to use oil as a fuel source, we'll need to use pipelines to transport the oil with any reliable degree of safety. Whenever anything large and relatively complex as a train is used to carry anything as volatile as crude oil, the risks multiply.

The principle of "everything that is not prohibited is inevitable," a bedrock of law and physics, works against us.

There is a plan in the offing to construct a pipeline in the vicinity of Sidney, Montana, for the express purpose of transporting the copious amounts of Bakken crude. The $542 million pipeline is only part of the infrastructure build out that part of the country will experience.

ONEOK, Inc. (NYSE:OKE) subsidiary, Oneok Bakken Pipeline, is planning to invest between $3.6 and $4.2 billion in the region between 2011 and 2015, all for Bakken products. Natural gas liquids, natural gas gathering and processing, and crude oil are all targeted by Oneok.

The company is one of the single biggest players in the Bakken now, and it owns some 3,500 miles of expanding infrastructure. Shares of Oneok are down a bit from their 52-week highs, but are holding up nicely.

There will be more pipeline coming to the Bakken. The alternatives just aren't workable in the long run. Once the Bakken oil is really flowing freely, the exports can begin in earnest.

While we're all waiting for the Bakken oil to get un-stuck, you're sure to enjoy reading Dr. Kent Moors' free 2013 Oil Forecast. In the forecast, Dr. Moors reveals the lowest oil prices we'll ever be likely to see. Click here for the forecast.

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  1. Eric A. Tuttle | July 13, 2013

    Do your research…… to its fullest. Oil, Trains, Pipelines are not the answer, just part of a continuing problem.

    A member of the Admin Team at

  2. ElectroPig Von Fökkengrüüven | July 15, 2013

    If we had any sense at all, we'd be building new refineries CLOSE TO THE SOURCE, and completely ELIMINATING the problems of transportation of crude for processing. Of course, they'd be useless in 10-20 years…so no "dwindling resource owner" is going to throw good money into refineries when they know they're already running out…they'd never get their profits back.

    That's not even taking into account the fact that we never needed petroleum-distillate fuels in the first place! We already HAD "biofuels" everywhere! EVERY farmer could grow their own fuel, and since they didn't have no other choice but to buy fuel to run their cars, trucks and tractors, it was not a drag on their income, nor did it artificially increase the cost of food as a consequence.

    Screw OPEC…go back to naturally sourced, annually-renewable, closed-carbon-loop fuels, and we can stop worrying about WHEN the oil really IS going to run out…because we won't NEED it any more.

  3. Robert in Canada | July 15, 2013

    It was a US owned train, carrying US oil, and operated by an American crew.

    But not a single word of condolences to Canadians from your dear leader, President Obama.

    We got condolences from the Pope, the Queen of England, President of France, and many other world leaders. We appreciate their thoughtfulness at our time of sorrow.

    But not a bloody word from your dear leader, President Obama. What an S.O.B. pig he is, playing politics with this tragic event.

    He is scared to say anything against shipping oil by rail because then he would appear to be supporting pipelines. But that would pee-off his best supporters – left wingers and enviro-nuts.

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