Keystone Kops Chase Oil Onto Trains but Mounties Round Up Older Tank Cars – Will Oil Sands Producers Stay on the Rails?

Last week Transport Canada (the federal department responsible for transportation policy) directed that DOT-111 rail tank cars built prior to new safety standards proposed in January 2014 be phased out or refitted within three years. Fifty five thousand railcars built to the new standards are currently on back-order. The directive could constrain rapidly developing Canadian crude by rail shipments to the US - currently running at about 250 Mb/d according to an April report by Peters and Company. Increased use of crude-by-rail is driven by pipeline congestion out of Alberta - a situation the latest Keystone pipeline delay appears to make worse.    Today we review unit train options out of Western Canada.

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