ESG & Industry Updates

Transportation DeCarbonization: Rail Transport

Posted by Kelly Burke on Apr 3, 2023 10:50:32 AM

 

In recent political cycles, we’ve heard a lot of talk about Rail transport in the United States. Most of that talk has been in the context of the US needing more rail accessibility, so it may surprise some to discover that the United States actually has the largest rail network in the world. The catch is, this network is used primarily for freight, not passenger transport, and generally when we speak about rail (at least in politics and on the news), we mean for passengers. Freight made up 91% of all rail-use energy in 2019, so we almost exclusively use it for freight transport, in fact.

Rail accounts for 28% of freight transport by ton-miles, but only resulted in 2% of total transportation emissions. So, given that rail is astonishingly more efficient than both trucking and single vehicle passenger transport (cars), part of the focus on rail is an effort to expand its accessibility, particularly on the passenger side. This would have a two-fold impact on emissions because we would see both an increase in utilization of a lower emission intensive mode of transport, and a simultaneous impact on decreasing traffic related emissions from more intensive transport methods.

Freight rail transport in the US uses diesel locomotive engines almost exclusively, where passenger rail has a mix of diesel and electric. Most intercity transport is diesel, where some light rail and streetcar transport is electrified (think Commuter Rail versus Green Line MBTA lines). Full electrification looks like a near impossible hurdle for US freight transport, because of both the long distances and low traffic levels on most rail lines. Additionally, the current electrification modes in use like overhead lines, or third rails are obviously not at all conducive to long rail lines – emission reductions in this segment would most likely have to come from renewable fuels, hybridization, or new technologies. However, electrification of commuter lines may offer an avenue for further sector emission reductions.

The goals and steps outlined by the Federal Government in the Transportation Blueprint for rail include:

  • Infrastructure Investment: electric locomotives and electrification corridors investment, as well as investment in facilitating the availability of clean/renewable fuels.
  • Multi-stakeholder Collaboration: enhanced partnerships amongst those in government and industry with a vested interest, in order to accelerate the pace of technology development, adaptation, and accessibility.
  • Research & Innovation: investment in research to determine the best and most viable strategies for decarbonization of the sector, particularly through the use of pilot programs to optimize the gathering of real-world data and allow accurate analysis of all the vehicle and environment factors involved to accelerate development in the best clean technologies.

Again, as with the other segments being discussed, a successful pivot away from primarily diesel based rail transport in the United States would have longer term impacts on the market in terms of supply & delivery demands for diesel fuel and associated lubricants.

Something to keep in mind, and that we will keep an eye on as the process continues.

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Topics: EPA, Carbon Emissions, railcar regulations, renewable energy, Biden Administration, decarbonization

Pipeline Stubbornness - Canada's "Work Around" & US Environmental Harm

Posted by Ed Burke on Oct 17, 2014 12:00:00 PM

 

In response to the perpetual Keystone XL pipeline approval delays by the US government, Canada is closing in on a deal to make the final Keystone connection "irrelevant", in the words of former US ambassador from Canada McKenna. 

How? By going East. 

The proposed route would take Bakken shale oil from Alberta to Quebec, and then onto the Irving refinery in St John. The route would utilize an existing, underused nat gas pipeline, with some additions and modifications. The deal would reportedly be a 50-50 venture between TransCanada and Irving Oil.

The port in St John puts Canada in the position of being able to easily and efficiently ship oil to India, or Europe, versus being forced to transport huge quantities (160K barrels per day) by rail instead of pipeline into the US.

An irony of the Keystone delays, as well as pipeline opposition in general, is that it's pretty easy to argue that pipeline transport is more environmentally friendly than railcar or any other means of transport. 

In 2013, 1 million barrels of oil per DAY were transported by railcar, while that number is expected to jump to 1.5 million this year. 

Why? Because Shale is booming and we have no pipeline. And because environmental groups and prominent financiers (ala Tom Steyer, who pledged $50 million dollars to support candidates that oppose the Keystone pipeline) argue that pipelines, especially the Keystone, are environmentally bad news. But is that true? And more importantly - is the alternative to pipeline transport even worse?

It would appear that yes, the alternative may be worse. A Congressional report from a few months ago stated that more oil spilled in 2013 due to railcar accidents than had in the past 35 years. Seems crazy, since stricter safety and environmental standards have been imposed over that 35 year time period in transportation and every other industry. 

Speaking of safety regulations - upcoming costly new regulations on retrofitting railcars are on the horizon. These proposed regulations came up after several high profile railcar explosions (notably Lac-Megantic, which destroyed half a town and killed almost 50 people)

The costs of these retrofits are potentially crippling. The Wall Street Journal reports that thousands of railcars are being scrapped - but it will be tough for the industry to supply new, conforming railcars quickly enough to keep oil transportation costs down. 

(As an aside, these railcar regulations will also impact ethanol transport. A recent Federal Investigation found that ethanol rail transport was equally or more dangerous than crude rail transport. In fact - when exposed to prolonged fire, ethanol railcars were found to be 150% more likely to explode. Yikes.)

So if continual delay on Keystone is having an environmental impact, and new regulations for the alternative-to-pipeline transport method could drive costs up... what exactly is everyone still arguing about?  

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Topics: Keystone XL, TransCanada, shale, railcar regulations, irving oil, environment

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