Understanding Crude Oil Transportation Strategies in North America

Understanding Crude Oil Transportation Strategies in North America

Name:

Student Number:

Course:

Date:

Understanding Crude Oil Transportation Strategies in North America

Introduction

The use of pipelines as a means of moving crude oil components across the United States and Canada has been criticized because of the associated effects. Effects such as environmental degradation attributed to green house emissions and spillage of diluted bitumen are some of the grounds for opposition towards the use of pipelines to move crude oil (Macdonald, Morton & Johannessen, 2003). On the other hand, supporters of pipeline movement of crude oil in Canada and the United States note that restricting the usage of pipelines could lead to high costs of operation likely to be passed on to consumers, high risk, safety concerns and excessive levels of green house gas emissions (GHG). Thus, the debate is primarily on the ability of railroads in North America to accommodate any potential increases in oil sands production and associated social, economic, and environmental impacts (Carlson, & Sussman).

Strengths

It is evident that the hesitation in resumption of movement of crude oil by rail is in part attributed to the uncertainty over approval of new pipelines between the United States and Canada (Macdonald, Morton & Johannessen, 2003). In addition, leaders in the United States and more specifically, President Obama note that this uncertainty has been helpful in slowing down production of oil. In the process, it has resulted in the achievement of reduction of green house gas emissions associated with movement of crude oil. Furthermore, this has also enabled increased pressure on the Canadian government to develop a consistent federal policy in the management of green house gas emissions in the gas and oil sectors (Carlson & Sussman).

Weaknesses

The article fails to articulate clear strategies towards the resolution of this conflict of interest by developing a common platform for the two countries to optimize and maximize their trade with one another.

What I learned

The differences in effectiveness and efficiency of railroad and pipeline movement of oil are primarily based on the environmental, economic, and social impacts. The potential of increasing oil sands production would benefit Canada on a great level. Thus, the Canadian government, through federal political outfits, is moving rapidly towards establishing effective and rapid means of movement of the oil sands into the United States. In addition, the benefits of increased oil sands production can also be seen in the United States, with anticipation of high employment levels from 2010’s figure of 21,000 jobs to 465,000 positions by the year 2035 (Carlson & Sussman).

Alternatively, the uncertainty of transportation mechanisms in the oil and gas industry can be attributed to conflicts of interests and the associated benefits and consequences of either using railroads or pipelines to move oil sands into the United States. The United States government has downplayed the importance and associated benefits of developing new pipelines or railroad movement of oil sands (Macdonald, Morton & Johannessen, 2003). This is attributed to the perceived divergences in benefits associated with aggressive development of new infrastructure. The United States government has claimed that new pipelines would offer minimal benefits to the United States while having significant effects on the environment in terms of high levels of green house gas emissions and minimal growth in employment numbers (Carlson, & Sussman).

The Canadian government seeks a cost effective transport system for its crude oil with the ability to handle increased production of oil sands (Macdonald, Morton & Johannessen, 2003). The Canadian government is moving towards approval of construction of pipelines to eliminate this uncertainty in the crude oil sector. On the other hand, the United States government bases its reasons on priorities such as reducing greenhouse gas emissions, which has been touted as a primary reason for delayed engagements between the two countries in developing new pipelines (Carlson & Sussman).

Conclusion

Both railroads and pipelines have varied perceptions to both governments, given the divergences in terms of cost effectiveness, social impact, and environmental consequences. These reasons are central towards the slow pace of adoption of either method in moving the increasing number of oil sands produced. The uncertainty can only be eliminated through an understanding between the two countries in terms of the most effective form of transport for the lucrative oil and gas industry (Carlson & Sussman).

Reference

Carlson, J. S. & Sussman, M.J. (n.d). Understanding Crude Oil Transportation Strategies in North America. Massachusetts: Massachusetts Institute of Technology.

Macdonald, R., Morton, B., & Johannessen, S. (June 01, 2003). A review of marine environmental contaminant issues in the North Pacific: The dangers and how to identify them. Environmental Reviews, 11, 103-139.