Crash Risks Stopping Crude Rail Boom In Its Tracks
BMI View : The latest major rail accident involving crude transportation in North Dakota is likely to bring further regulatory attention to the safety of crude-by-rail transport, and could also weaken the argument against the safety and environmental risks of crude oil pipelines. This is of particular importance to North Dakota, which has been relying on rail to transport the majority of its crude oil output to refineries outside of the state. Pipeline projects planned in North Dakota could get a boost should closer scrutiny and caution against railway deliveries provide momentum for the expansion of the state's crude oil pipeline network.
A major accident involving a train carrying crude in North Dakota could signal the beginning of the end of the buoyant sentiment surrounding crude-by-rail in the US. On December 30, a Burlington Northern Santa Fe Railway (BNSF) train carrying at least 10 tank cars of crude oil collided into another train that had derailed, resulting in several explosions and a large fire that required the evacuation of residents in the nearby town of Casselton. While no injuries were reported at the time of writing, firefighters faced difficulty putting out the fire due to high temperature and risks that further explosions could take place.
The accident is likely to spark off a debate about the safety of transporting crude by rail, which has soared in North America over the past two years as a result of the lack of pipeline infrastructure to support the region's crude oil boom.
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|North Dakota Monthly Crude Oil Production (b/d)|