Delays in building pipelines means we are shipping nearly twice as much crude oil by rail than before.
To address the bottleneck, we are increasing our rail capacity overall. This includes getting more rail cars so we can ship our oil to world markets where it can fetch top dollar.
This will create enough new rail capacity to increase oil shipments by 120,000 barrels per day by the end of 2019 when the new cars are ready.
When oil producers are able to ship more oil to more markets, they’re able to get a better price for their products. This means higher revenues for Albertans.
When pipeline access is limited, shipping by rail:
- increases the volume of oil that can be shipped
- increases the number of markets and refineries Alberta products can reach
- supports smaller producers that may not have pipeline contracts
Currently, the cost of shipping a barrel of oil by rail to the Gulf Coast is about $9 to $12 US more than shipping by pipeline.
While crude by rail is a viable option, pipelines remain the most cost-effective way to transport Alberta oil.
How it's done
Crude oil is loaded onto rail tank cars at one of 21 on-loading facilities in the province.
These facilities can on-load about 750,000 barrels a day. This is expected to go up to 825,000 barrels a day once the Hardisty Terminal expansion is complete.
Transport Canada introduced new safety standards for rail tank cars.
Under the new rules, only specifically designed tank cars can be used to transport crude oil. They are made of thicker steel and have several enhanced safety features that make them stronger and more resistant to damage.
Grain and other commodities
Alberta’s agriculture ad forestry sectors also rely on rail transportation to export from the province.
Grain shipments must continue to be a priority.
Most grain is shipped to the west coast so it can be sent overseas, while most crude oil is sent to the U.S. By increasing our rail capacity we will not be competing with agriculture and other shipments.
Overall, the rail companies have said the system can handle more traffic without affecting existing shipments.
Premier fighting for more value from Alberta oil (Nov. 28, 2018)