Train fire adds fuel to safety debate

Keystone Pipeline backers say a block to the project will put more oil on trains

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WASHINGTON — The train derailment and fire in North Dakota that forced the evacuation of most of a nearby town is sure to trigger more debate about the safety of transporting oil as the U.S. reviews TransCanada's proposal to build the Keystone XL pipeline.

"Any time there is an incident, you have heightened talk and scrutiny," said Brigham McCown, a former director of the Pipeline and Hazardous Materials Safety Administration.

More than 2,000 North Dakota residents were urged to flee possibly toxic fumes from the fire that engulfed BNSF Railway cars carrying oil after they collided on Monday with another train about 25 miles west of Fargo. BNSF is owned by Berkshire Hathaway.

While climate change has been the focus of the fight over Keystone, a subset in the debate has been the relative safety of pipelines versus trains as the U.S. State Department weighs whether the border-crossing project is in the U.S. national interest. The $5.4 billion project would link Alberta's oil sands with refineries along the Gulf Coast.

The accident in North Dakota is the fourth major North American derailment in six months by trains transporting crude. Record volumes of oil are moving by rail as production from North Dakota and Texas has pushed U.S. output to the most since 1988 and pipeline capacity has not kept up.

"I think this — seemingly yet another rail incident -- will add to the clamor," for more regulation of shipping oil by rail, wrote Tony Hatch, an independent rail analyst based in New York.

Critics of Keystone have pointed to pipeline spills in Alabama and North Dakota.

Despite the incidents, McCown, who is now an industry consultant and a supporter of Keystone, said both trains and pipelines are safe, with few incidents relative to the amount of crude they transport. One advantage pipelines have is that they tend to be in more sparsely populated areas, he said.

"Rail built the West. Rail built most of the towns," he said. "As a consequence, there are more rail lines going through more populated areas."

Anthony Swift, a Natural Resources Defense Council attorney, said Monday's incident underscores the need to improve train safety in the U.S., regardless of whether Keystone gets built.

"Crude by rail is happening in North Dakota. It's not related to Keystone," Swift said. "Keystone isn't going to eliminate this crude-by-rail movement in the U.S."

The State Department review of Keystone's environmental impact includes whether the pipeline would lead to more carbon-dioxide emissions. That analysis could be released in the next few weeks.

President Barack Obama said in a June speech on climate change that he wouldn't approve Keystone if it would lead to a significant increase in carbon-dioxide emissions.

McCown said rail use would probably increase if Keystone were blocked. "The oil will find its way to market," he said.

Critics of Keystone argue that development will stall if the pipeline, which would have a capacity to carry 830,000 barrels of crude, is blocked by the administration.

Michael Whatley, executive vice president of Consumer Energy Alliance, an industry-backed group that supports Keystone, said more rail accidents can be expected with the increased use of trains to carry oil to market.

"Trains need to be a supplement not a replacement" to pipelines, Whatley said. While both forms of transportation are safe, "we need expanded pipeline infrastructure," he said.

Relative safety

A draft supplemental environmental impact statement released by the State Department in March includes a brief comparison of the safety of pipelines versus rail.

While derailments probably would release less oil than a pipeline rupture, trains have an "increased statistical likelihood of spills," the report said.

The North Dakota crash is "a wake-up call for what increased oil production in North America is going to mean" for communities in the U.S., said Stephen Kretzmann, executive director of Oil Change International, a Washington-based group that opposes the use of more fossil fuels.

Kretzmann said that while he expects advocates of the Keystone pipeline to use the train crash as evidence that rail transport is unsafe, pipelines also pose dangers.

The best solution "is to phase down oil production," Kretzmann said.

The most recent incident occurred when a westbound train carrying soybeans derailed west of Casselton, N.D., just after 2 p.m. local time on Monday, said Cecily Fong, a spokeswoman for the state Emergency Services Department. An eastbound train carrying oil on adjacent tracks hit the derailed train, causing the fire, she said.

The investigators from the U.S. National Transportation Safety Board were delayed in reaching the site because the fire was still burning, board member Robert Sumwalt said Tuesday morning in Fargo.

Nineteen cars carrying crude oil derailed when the train struck the other freight train's cars, Sumwalt said. One railcar can hold about 700 barrels of oil, according to the Energy Department.

Initial reports were that the oil-carrying rail cars were DOT-111 models, he said. The NTSB has urged the U.S. Pipeline and Hazardous Materials Safety Administration to issue tougher standards for such cars to make them more resistant to puncture during accidents.

The pipeline agency is reviewing updates to its rules.

Two to three rail cars were still burning and 1,500 people living within 5 miles of Casselton were evacuated, said Tara Morris, a spokeswoman for the Cass County Sheriff's Office, at 10 a.m. North Dakota time Tuesday.

No injuries to the train crews were reported, BNSF said. "We are thankful there have been no injuries … and are terribly sorry for the inconvenience this derailment has caused residents in the area," the company said.

About 65 percent of the 2,400 residents of Casselton left their homes as BNSF crews cleaned up debris while waiting for fires in two or three rail cars to burn out, Morris said.

BNSF, based in Fort Worth, Texas, didn't provide an estimate for when the tracks will reopen. The railroad carried about 500,000 barrels of oil a day in March, Berkshire's Chief Executive Officer Warren Buffett said at the time.

Continental Resources, the largest leaseholder in North Dakota's Bakken shale field, sees "slight delays" for several days in shipments from the region, company spokesman Warren Henry said Tuesday.

Effect on markets

The destination of the oil was not immediately known. Phillips 66, Irving Oil and Philadelphia Energy Solutions all said it wasn't headed to their refineries.

Oil produced in North Dakota's Bakken formation for delivery at Clearbrook, Minn., strengthened 75 cents a barrel to a discount of $7.50 a barrel versus U.S. benchmark West Texas Intermediate crude at 2:06 p.m. New York time, Bloomberg data show.

Monday's derailment "is likely to flare up the debate on the environmental side of the shale oil boom, which could result in higher costs for the industry," JBC Energy, a Vienna-based energy consultant, said Tuesday.