Why We Need To Keep Our Oil At Home

Soon, and very soon, the United States will surpass Saudi Arabia in total crude oil output to become the world’s leading producer. Production has increased at a breakneck pace as hydraulic fracking has opened up previously untouched reserves. The big push now will be to open U.S. produced oil to unrestricted exportation. Currently we are 40 years into a ban on most unrefined oil exports, and it would be a bad idea to abolish the status quo. 

While the hundreds of thousands of oil wells in production present potential problems in and of themselves, a greater concern lies in getting all this oil to market. The controversy over the recently proposed pipeline by Enbridge to deliver oil from the Bakken oil fields of North Dakota to a Superior refinery is just one small facet of the problem, and this isn’t just about granola eating hippies protesting the habitat loss of voles. 

The Pipeline and Hazardous Material Safety Administration website lists 586 pipeline incidents for 2013.  The 10-year average is 15 fatalities per year as a result of these incidents, with an average of 62 injuries per year. This past fall 865,000 gallons of oil leaked throughout seven acres of a North Dakota farm due to corrosion in a 20 year old pipe. 

Of grave concern recently is the practice of transporting oil by rail. Incidentally, all other types of transportation companies can refuse hazardous loads, but the railways cannot. They are legally obligated to take these hauls, even though it is not possible for them to obtain enough insurance to cover worst case scenario accidents. An article in the January 9th Wall Street Journal on the topic was shocking. 

Last July, 47 people were killed when a runaway driverless oil train careened out of control downhill and derailed at top speed in the center of a town in Quebec. The crash resulted in an inferno of mammoth proportions as the entire downtown area was incinerated. Apparently manhole covers launched into the air from the pressure exerted from below. 

Notwithstanding the devastating human toll, the financial cost of this is running into the hundreds of millions of dollars. However, the rail carrier was only able to obtain $25 million in insurance coverage. Currently the Canadian government is helping to foot the bill. 

There have been at least four major oil train accidents in the past six months in the US and Canada, including a mile-long train carrying crude oil that exploded into a fireball on December 30th outside of Fargo. 

These accidents are not just the result of human carelessness, corporate greed, or technological failure. Rather, they are inevitable as a mathematical certainty as volume picks up. Safety regulations will certainly be tightened, but accidents will continue into the future. 

Incidentally per their website, Calumet Superior Refinery has a capacity of 45,000 barrels per day, and is supplied by pipeline and railcar. These issues affect us directly as well. 

In an example affecting another commodity, a chemical used in the processing of coal leaked into a river about a mile upstream from a major water treatment facility in West Virginia recently. The spill contaminated water supplies for several hundred thousand people in the capitol and in nine surrounding counties. Who in their right mind would allow the placement of a storage tank containing a hazardous chemical a mile upstream from the capitol’s water intake? 

These are the sorts of accidents that are inevitable when we run at a breakneck pace while extracting our energy sources. By preventing the lifting of the export ban of oil, we are keeping the pace of extraction from accelerating at an even more destructive pace. We need to slow down and sip our nation’s oil more sustainably, and not engage in a self-imposed race that will only hurt us in the long run. 

Our nation’s long term energy security benefits by continuing the export ban, prices will remain lower for American consumers and industry, and the environmental impact will be lessened as well. Flooding the world market with cheap American oil will only increase demand worldwide at a time when we need to learn to leave some of our oil in the ground.

The photo below was used from an article at Bloomberg (http://www.bloomberg.com/news/2012-02-28/north-dakota-oil-output-may-top-high-as-weather-allows-drilling.html). I include it as it alludes to another issue I wasn’t able to touch on here. The infrastructure in many of these states affected by this oil rush has not kept pace with demand. Roads and small towns are inundated with oil workers, machinery, etc, in a case of too much too soon. Stretching out the extraction over more years will help these communities over the long term as a boom/bust cyle is inevitable. 

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