Even if foes of the Keystone XL pipeline block it, companies seeking to get Canada’s oil sands to U.S. and world markets could travel the old-fashioned way: by rail.
While TransCanada has been trying to obtain a U.S. permit to build the 875-mile northern leg of its Keystone XL pipeline, Canadian and U.S. railroad companies have been busy installing new track and loading facilities to carry the oil sands crude from northern Alberta to refineries in the United States and Canada.
Rail shipments of Canadian crude oil sands are on track to quadruple this year. Producers and refiners are scrambling to buy their own tank cars in order to lower the cost and increase the certainty of transport. Industry sources said that there is an 18- to 24-month waiting period for new tank cars in Canada.
The rail expansion is a central issue in the debate over whether the State Department should grant a permit for the northern leg of the Keystone XL pipeline, which would run from Hardisty, Alberta, to Steele City, Neb.