A boon to ‘bomb trains’
A boon to ‘bomb trains’
How a railroad megamerger could create an attractive new option for shipping Canadian tar-sands oil to U.S. refineries when pipelines fail.
Greetings from rainy Astoria, Queens, where the massive upzoning project you may remember reading about here a few weeks ago looks less doomed than it did last time we were in touch. The developers behind Innovation QNS committed to making 40% of the roughly 2,800 units of new housing affordable, up from 25% in previous pitches.
City Council will make the final decision. While it’s not law, the legislature’s tradition is to give the council member in whose district the rezoning project is located a veto. Councilmember Julie Won has said she wanted 50% affordable, and it remains to be seen whether she’ll compromise for 10% less.
But there is something of a change afoot among progressives. Tiffany Cabán, the council member for the neighboring district in Astoria (where I live), gave her blessing to a redevelopment down by the river, in what Sam Mellins over at New York Focus described as “a shift” in how left-wing lawmakers in the city approach land-use issues.
We’ll soon find out whether that was a one-off or not as rents in northwest Queens spike at a record clip.
Some other updates from me over the past month: I interviewed Jane Fonda and wrote about what happens if war triggers a radiation accident in Ukraine. I was back on the BBC World Service’s “Business Matters” and spoke on the podcasts “Titans of Nuclear” and “Path to Zero.” I returned from Norway, which was beautiful but expensive, and I went up to the Adirondacks to camp and climb Mount Haystack, which was beautiful but brutal on the knees.
With that little local/personal news update out of the way, let’s get to why I’m really here in your inbox today: To talk about trains.
Specifically, I’m writing to tell you about a proposed railroad megamerger that could have big implications for the oil industry.
“It is a deliberate, intentional workaround for the loss of Keystone."
That’s how one environmentalist in Detroit described the proposed fusing of Canadian Pacific and Kansas City Southern into what some have called a “NAFTA super railway.” The merged company would create an attractive new option to move Canadian tar-sands oil to U.S. refineries on the Gulf of Mexico.
It would be the latest example of consolidation in an industry that went from 40 separate Class 1 railroads in 1980 to just seven today.
Two excellent recent pieces in the American Prospect go into the implications of further consolidation, and what it means for supply chains. What I examined in my piece is what effect the Canadian Pacific-Kansas City Southern would have on oil shipments.
The fight against Keystone XL was aimed at limiting shipments of the uniquely carbon-intensive oil produced in Alberta. Biden axed the project for those reasons. But that didn't stop the flow of tar sands oil into the U.S.
Actually, two other pipelines quietly took Keystone's place. One was Line 3, which environmentalists fought hard to stop. The other was the Capline pipeline, in which Marathon reversed the flow to go southward.
As a result, crude-by-rail shipments from Canada peaked in 2019 and ticked downward since.
Shipping oil by rail is virtually always more expensive than using a pipeline. But a new singular route where shippers wouldn't need to pay fees to different railroads could make rail cheaper -- offering a more attractive back-up option to oil producers, analysts told me.
If new pipelines fail to be built, or existing pipelines are shut down (or disrupted by activists), that option will become even more valuable to the industry.
While it may not lead to a big uptick in crude shipments overall, it will mean more oil shipments via certain regions. That's a terrifying prospect to many people. At best, it means miles-long freight trains halting commuters. At worst, it could mean a repeat of "bomb train" accidents that are shockingly common.
In 2013, a crude-freighting train lost control and exploded in the tiny Québec town of Lac-Mégantic, killing 47 in Canada's deadliest rail accident since 1894. Since then, at least 20 more oil trains have derailed between the U.S. and Canada.
But would stopping the merger on those grounds make much of a difference?
“If you don’t have the pipeline and it makes economic sense, the stuff is going to move by rail, one way or the other,” railroad analyst Lawrence Gross told me. “This becomes more of a story of how it moves rather than whether it moves.”
Read the full story here on HuffPost.
Puerto Rico’s private grid operator can’t keep the lights on. But the territory’s governor says it’s not the time to consider canceling the contract. El Nuevo Día
South Korea’s kimchi makers are on the verge of a crisis. Hotter temperatures and heavier rainfall damaged cabbage crops, doubling the price of the produce in less than three months. Competition with cheaper Chineses imports is only making it harder. South China Morning Post
There were “Obama boys” and “Bernie bros.” Now there are “nuclear bros.” But does the gendered epithet really accurately describe the movement in favor of more atomic energy? The Washington Post
Belgium is moving ahead with its planned nuclear shutdown. The move comes as Europe’s historic energy crisis adds pressure on notoriously antinuclear Germany to keep its remaining reactors open. The Brussels Times
The United Auto Workers are backing deep-sea mining. The union signed a neutrality agreement with a Canadian company seeking to extract the minerals needed for electric vehicles from nodules deep on the ocean floor, potentially furthering its rift with environmentalists who say the mining will destroy untouched ecosystems. The Detroit News
Clean-energy permit requests are going up, but the staffing at regulatory agencies isn’t. This problem exists in many places, but in New York, where the paltry percentage of renewable-energy capacity offers a stark contrast with the state’s climate goals, it’s especially pronounced. New York Focus
Thank you for reading. Here’s something nice.