Although pipelines are still the primary carrier of oil
pumped in North America, “crude by rail” is growing as an alternative. In 2008,
railroad revenues for transferring crude oil were $25.8 million. By 2013, revenues
skyrocketed to $2.15 billion. Currently, about 20% of the total oil pumped in
the U.S. is being transferred by rails
Even though it may cost more to ship oil by trains than
through pipelines, railroads have the benefit of flexibility by being able to
deliver oil to more areas. Another benefit is that it has a lower capital
expense. On the other hand, a disadvantage of using railways is the possibility
of oil-train derailments which cause eruptions. Additionally, environmental
factors are a source of concern with the use of more railways.
Can railways reshape the crude oil market or should pipelines
continue to be the primary means of transporting oil?
Can federal regulations help reduce the danger and
environmental damages of trains or do these potential costs far exceed the
potential benefits?
http://online.wsj.com/articles/dangers-aside-railways-reshape-crude-market-1411353150?KEYWORDS=railways
Government regulation can help to reduce the dangers of shipping by rail and the government is already working on implementing such policies. The article discusses lower speed limits and tighter car restrictions, both of which will help reduce train accidents. Shipping by rail is a growing industry, and since there is currently a large rail system already set up that can be used by the companies, I think it will continue to grow. It is much easier for companies to use the current rail system than to attempt to overcome the many political stepping stones required to build a new pipeline. As the industry grows the government will impose more regulations to help reduce accidents.
ReplyDelete