BUSINESS

Crude-by-rail exports dip in fourth quarter: National Energy Board

03/06/2015 03:07 EST | Updated 05/06/2015 05:59 EDT
CALGARY - Canada's crude-by-rail exports dropped in the final three months of last year as oil prices shrivelled, according to new data from the National Energy Board.

During the fourth quarter, about 173,000 barrels of oil moved south of the border on trains every day, around five per cent less than the third quarter, when the figure was about 182,000 barrels a day.

But that's still 16 per cent higher than the 149,000 barrels a day that moved during the last three months of 2013.

Crude prices deteriorated throughout the latter half of 2014, with the decline intensifying toward the end of the year — from June highs above US$107 a barrel to less than half that. The April contract for U.S. benchmark crude was below US$50 on Friday.

Greenpeace campaigner Keith Stewart says he's not surprised by the NEB's numbers, since shipping by rail is more expensive than pipeline.

"When oil's US$100 a barrel, the extra $10 to get it there by rail is doable. At US$50, not so much," he said.

The NEB estimates Canada's overall crude exports totalled about 2.9 million barrels a day during the fourth quarter, down slightly from the previous quarter and up nine per cent from the same quarter a year earlier.

On a quarterly analyst call last month, oilsands giant Suncor Energy Inc. (TSX:SU) said it has stopped sending crude by rail to the U.S. Gulf Coast because it's "not economic at this point."

Generally, oil companies like Suncor would prefer to move their crude to market by pipeline. But with projects such as TransCanada Corp.'s (TSX:TRP) $8-billion Keystone XL pipeline mired in political wrangling and regulatory delays, producers turned to rail.

Supporters of projects such as Keystone XL have said if new pipelines aren't built, crude will get to market anyway — just by less safe and environmentally sound means. Therefore, the argument goes, approving Keystone XL would not contribute to higher greenhouse gas emissions, since the oil would be developed regardless.

But Stewart says the NEB's latest numbers undermine that view.

"The interesting thing here is this is happening even as Canada's ambassador to the U.S. has been ramping up the rhetoric on how if the Keystone pipeline isn't built soon, then all that oil will move by rail," he said.

"The evidence doesn't support that and it's not going to happen."

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