The biggest railroad of Canada has stated that in its efforts to transfer crude in puke-like solid form, it is now attracting more interest from the producers of oil. This is because more oil is diverted to riskier rail transport via clogged pipeline.
In Alberta, much of Canada’s crude gets stranded because of congested pipelines. This has therefore led to discounts at record high levels. On Friday, the heavy crude of Canada has traded for less than one third of the benchmark price of oil of the United States.
On Thursday, the sector witnessed the latest blow because of an order passed by the court of the United States in which it had temporarily banned the construction of Keystone XL pipeline of TransCanada Corp to test the environmental viability of the project.
The pressure of the pipeline has a result put more and more push on the Canadian National Railway Co’s trains. Canadian Pacific Railway Limited has also benefited despite being a smaller rival. However the movement of crude by railways is very expensive and is also highly prone to spills. These spills also cause accidents which are often disastrous.
The classical example of this would be the derailment at Lac Megantic which occurred in 2013 in Quebec in which a dozen or so people were killed.
The patented product of CN, Canapux product which is crude in solidified form and is even plastic coated. It has been named to evoke the most popular sport, hockey, of the country.
The railroad has been arguing that the solidified crude can be transported all around the world in a cheaper and efficient manner. It will also impart less risk to the environment than the transporting via tank cars do.
Moreover since Canapux is solidified therefore it can be recovered easily after a spill into any water body.
Source: Reuters, EconomicTimes