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The Lac-Mégantic Oil Spill and the Future of American Energy

Absorbent foam is used to soak up crude oil in the La Chaudiere River in Lac-Megantic, Quebec July 10, 2013

The train derailment and explosion near Lac-Mégantic, Quebec earlier this month heightened debate over how we move oil across North America. Supporters of pipelines, including the Keystone XL project, are calling the efficacy of railroads into question, while rail advocates are highlighting their safety record and the need to keep up with the output from the Bakken oil deposits in North Dakota and elsewhere.

This conversation, however, misses a bigger reality: Our metropolitan economies are addicted to energy, meaning we will need to bear the direct and indirect costs of feeding that addiction.

Even as we rely less on coal and use more alternative energy sources, petroleum and natural gas are still the primary fix for our energy habit. Together, they accounted for nearly 64 percent of America’s primary energy consumption in 2012, far eclipsing other sources. For better or worse, they are the essential ingredients powering our industries and moving our workers.

Recently, the source of those energy supplies changed significantly. Domestic energy production surged over the past four years, shale gas and crude oil in particular. These rising levels of production, combined with advances in technology and other emerging economic factors, increased several of our energy exports relative to imports. According to some estimates, the United States is poised to pump 11.1 million barrels of oil a day over the next decade, putting it on track to overtake Saudi Arabia’s total oil output by 2020.

Yet, what often gets lost in the trade discussion is the effort needed to move all that oil. Since energy is rarely sourced in the same place where it is ultimately consumed, infrastructure—regardless of its type—plays a vital role facilitating this movement and fueling our metro economies.

Currently, most of the infrastructure burden falls on pipeline or freight rail. The recent domestic boom has greatly benefited railroads, which provided needed capacity where pipelines have fallen short. Major firms like Union Pacific and CSX are now transporting record carloads of crude oil—166 percent more in the first quarter compared to a year ago. Still, by sheer volume, pipelines remain the primary link to connect oil extraction, refinement, and consumption.

Last week’s disaster reminds us of how risky all that movement can be.  Accidents happen in infrastructure, whether we want to account for them in our collective consciousness or not. Truck accidents result in extensive damage every day, and even the safest transportation mode—aviation—experienced a domestic crash this month. Train derailments and pipeline leaks both pose significant hazards, and the extent of damage can vary widely as a result. But to point the finger solely at transportation companies misses the point—it’s our need to drive and industrialize that compels oil to move over long distances.

Renewable energy sources may remove the threat of such environmental accidents, but the transition will incur its own costs. Just like oil, the major sites of clean energy production will not be the same as the sites of consumption. For example, sunshine is a precious resource in parts of the Great Lakes and Pacific Northwest, while the Great Plains lacks access to coastal waves. To help that energy move from origin to destination, the country will need to make significant investment in a higher-capacity and more reliable electrical grid, plus new local resources such as car charging stations. Renewables can help reduce oil spills across the continent, but they’re no free lunch.

Moving forward, the Obama administration and other leaders face difficult decisions. The Keystone Pipeline remains a political and environmental lightning rod, and now oil-related rail movements may face similar scrutiny. But irrespective of what leadership decides, no policies will change the need to move energy between our markets. In the face of that reality, the real question is what kind of energy do we want to move?

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