Study finds air pollution and GHG costs of crude-by-rail nearly 2x pipeline costs; much larger than spill and accidents costs
Researchers from Carnegie Mellon University and the University of Pittsburgh have found that the air pollution and greenhouse gas costs of shipping crude by rail are nearly twice as large as those for oil pipelines. Further, their estimates of air pollution and greenhouse gas costs are much larger than estimates of spill and accidents costs—more than twice as big for rail and more than eight times as big for pipelines.
The findings of their study, published by the National Bureau of Economic research, suggest that the policy debate surrounding crude oil transportation has put too much relative weight on accidents and spills, while overlooking a far more serious source of external cost: air pollution and greenhouse gas emissions.
Movements of petroleum products, particularly crude oil, have received enormous media attention. Almost all of the attention has focused on spill and accident costs despite the fact that air pollution and greenhouse gas costs are also likely to be significant.
Pollution emissions for pipelines and rail differ from one another in three important ways. First, while emissions from trains occur along the transportation route, emissions from pipelines manifest at the power plants that generate the electricity consumed by pumping stations. The distance between these power plants and the associated pumping stations can be quite large. Second, ground-level emissions, such as those from locomotives, tend to be more harmful than the same level of emissions released from tall smokestacks at power stations. Third, the existing railroad infrastructure moves goods through population centers. In contrast, power plants are typically located in less densely-populated areas. This difference matters for pollution exposure, because the emissions from trains moving through cities are likely to contact many more people than those emitted at power plants.—Clay et al.
To build their estimates, the researchers used data on locomotive diesel consumption; pipeline pumping station electricity consumption; locomotive and power plant emission factors; and an integrated assessment model which maps county level emissions to costs for counties affected by the emissions. Their estimations were also based on The Pipeline and Hazardous Materials Safety Administration’s 2015 study.
The paper is the first to compare the costs of air pollution, greenhouse gas emissions, and spills and accidents across rail and pipelines.
The study estimated that the air pollution and greenhouse gas costs of moving a fully loaded 100-car train (unit train) of crude oil from North Dakota to the Gulf Coast are about $150,000 and from North Dakota to the East Coast are $210,000. However, the air pollution and greenhouse gas costs of moving an equivalent amount of oil by pipeline to the Gulf Coast are $78,000.
The total estimated air pollution and greenhouse gas damages for oil shipped by rail from North Dakota in 2014 exceed $420 million. These estimates are a lower bound, the researchers noted, as in their analysis they assumed a train does not idle. Idling, especially in major cities such as Chicago, is very costly.
While the recent downward trend in crude prices has led to marked reductions in the movement of crude oil, other petroleum products continue to be moved by rail in large volumes. The issue of the relative costs of moving these products by rail and pipelines extends to those products as well. The air pollution and greenhouse gas costs of transporting different petroleum products will vary with the characteristics of the product and the pipeline. The results presented here suggest that further research on the air pollution and greenhouse gas costs of transporting these products is necessary.—Clay et al.
Karen Clay, Akshaya Jha, Nicholas Muller, Randall Walsh (2017) “The External Costs of Transporting Petroleum Products by Pipelines and Rail: Evidence From Shipments of Crude Oil from North Dakota” NBER Working Paper No. 23852 doi: 10.3386/w23852