John Ransom

Another major derailment of a train carrying oil through a town in the U.S. has caused the evacuation of 300 people, with oil washing into the James River in Virginia, which feeds into the Chesapeake Bay.

“A CSX train carrying crude oil derailed Wednesday afternoon in downtown Lynchburg, Va.,” reports Bloomberg, “prompting the evacuation of some 300 people. Six cars went off the tracks, and local news reports cite at least three breaches on a train carrying between 12 and 14 tank cars loaded with crude. Early videos and pictures posted by onlookers show plumes of black smoke billowing up from the crash. No injuries have been reported yet, although witnesses described a floor-shaking explosion that sent a fireball almost 200 feet into the air.”

So much for the “pipelines aren’t safe” argument that’s been delaying the obvious, easy choice to build the Keystone Pipeline.

Hmm, what’s safer? Oil that moves through a stationary pipeline, or oil packed into a 100 ton steel behemoth running at 50 mph on rails thinner than a man’s leg?

Or how about this: What’s cheaper? Oil running through a pipeline or oil running on a union-controlled railroad?

The Congressional Research Services (CRS) says that oil transported by rail, costs between $5-$10 per barrel more than oil transported by pipeline.

“Rail has also been critical to development of Canadian oil sands,” says CRS. “Although the vast majority of crude oil imports from Canada are delivered via existing pipeline, imports by rail are estimated to have increased from 1.6 million barrels in 2011 to 40 million barrels in 2013. Construction of the proposed Keystone XL pipeline could move a significant proportion of these shipments off the rails, as pipeline transportation is likely to cost less per barrel.”

And causes fewer 200-foot fireballs cascading through picturesque towns across Canada and the United States.

John Ransom

John Ransom’s writings on politics and finance have appeared in the Los Angeles Business Journal, the Colorado Statesman, Pajamas Media and Registered Rep Magazine amongst others. Until 9/11, Ransom worked primarily in finance as an investment executive for NYSE member firm Raymond James and Associates, JW Charles and as a new business development executive at Mutual Service Corporation. He lives in San Diego. You can follow him on twitter @bamransom.

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