JAMES FREEMAN: THE ECONOMIC COSTS OF FOREGOING THE KEYSTONE PIPELINE…..SEE NOTE PLEASE

http://online.wsj.com/news/articles/SB10001424052702303480304579579652612482622?mg=reno64-wsj

THIS IS A BIG PARTISAN ISSUE IN THE NOVEMBER ELECTIONS….REPUBLICAN INCUMBENTS AND CHALLENGERS ARE FOR THE KEYSTONE PIPELINE WITHOUT LIMITING “ENVIRONMENTAL” AMENDMENTS WITH ALMOST NO EXCEPTIONS. THE DEMS- INCUMBENTS AND CHALLENGERS, WITH THE EXCEPTION OF 17 NOTABLE SUPPORTERS, ARE ALL AGAINST THE PIPELINE WITHOUT THOSE LIMITING AMENDMENTS, AND PRESIDENT OBAMA HAS SHELVED A DECISION…..RSK

Some energy analysts figure the White House’s continuing refusal to approve the Keystone XL oil pipeline may become less relevant as oil companies develop other ways to ship their product. But the surge in oil shipments by rail is creating new public health risks while raising the cost of food production.

Today the Journal reports that after a series of accidents, cities and towns along railroad routes aren’t sure they have the capacity to fight potential oil fires. But disclosing more data about the shipments carries its own risks—such as better-informed terrorists. According to the Journal, “An emergency order from the U.S. Transportation Department in June will start requiring railroads to alert states about oil trains originating in North Dakota. But the rules, which follow accidents involving oil from North Dakota’s Bakken Shale in such unlikely locations as Lynchburg, Va., and Aliceville, Ala., already are coming under criticism. Some critics say the new rules are inadequate, while others worry that any disclosures will increase the likelihood of sabotage.”

 

Is oil shipment by rail clearly more dangerous than via pipeline? As our contributor Terry Anderson recently noted, “President Obama’s own State Department answered the comparison question plainly in February.” Its report “estimates that the Keystone XL carrying 830,000 barrels a day would likely result in 0.46 accidents annually, spilling 518 barrels a year. Under the most optimistic rail-transport scenario for a similar amount of oil, 383 annual spills would occur, spilling 1,335 barrels a year. The report is even harsher on railroads when it comes to human injuries and fatalities. It estimates that tank cars will generate ‘an estimated 49 additional injuries and six additional fatalities’ every year, compared with one additional injury and no fatalities annually for the pipeline.”

Six annual fatalities in a country of 314 million people isn’t a huge number, but when private investors are ready to build an alternative with zero projected fatalities, why should the White House object?

The rush to rail transport has other costs, as increased oil shipments are contributing to clogged railroads. In a recent story headlined, “Where’s the Fertilizer?,” the Journal reported: “Major railroad logjams that have delayed shipments of new cars and coal in the U.S. are threatening to keep some farmers in the upper Midwest from planting their crops on time. The rail snarls have created a backlog in fertilizer supplies, raising fears that farmers in the Dakotas, Minnesota and Wisconsin won’t have adequate nutrients to sow corn, wheat and barley. At the same time, farmers have struggled for months to get enough rail capacity to ship grain harvested last year to processing plants.”

The Journal added that, “North Dakota State University researchers this month estimated the state’s farmers lost $67 million in revenue since the start of the year because of delayed rail shipments of grain and soybeans.”

For environmentalists and the politicians who seek their donations, opposing the Keystone XL pipeline is largely a symbolic gesture, since the oil will find its way to market one way or the other. But for farmers, consumers and those who live along railroad tracks, the costs of the anti-Keystone campaign can be quite real.

The latest Morning Editorial Report is always available at wsj.com/morning. Follow on Twitter @FreemanWSJ.

Comments are closed.