North Dakota Train Fire Adds Fuel to Keystone XL Debate

Posted by Bloomberg

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Oil Transport Train on Fire

The derailment and fire that led to the evacuation of a North Dakota town has renewed the debate over whether it’s safer to ship oil by rail or pipeline as the U.S. completes a review of the Keystone XL project.

“Any time there is an incident, you have heightened talk and scrutiny on oil transportation,” Brigham McCown, a former director of the Pipeline and Hazardous Materials Safety Administration, said yesterday in an interview. “It will add to the conversation.”

Public safety officials urged more than 2,000 North Dakota residents to flee fumes from the fire that engulfed BNSF Railway Co. cars carrying oil after a collision Dec. 30 with another train about 25 miles (40 kilometers) west of Fargo. BNSF is owned by Berkshire Hathaway Inc. (BRK/A) of Omaha. The evacuation was lifted yesterday at 3 p.m. local time after health officials declared the air safe.

While climate change has been the focus of the fight overTransCanada Corp.’s (TRP) proposed Keystone XL pipeline fromCanada to the U.S. Gulf Coast, a subset in the debate has been the relative safety of pipes versus trains. The U.S. State Department, reviewing the $5.4 billion project because it would cross the U.S. border, is weighing whether the pipeline would be in the national interest.

Keystone would allow about 100,000 barrels a day of crude from the Bakken formation in Montana and North Dakota onto the pipeline through a link in Baker, Montana.