What the Keystone Pipeline cancellation means for crude-by-rail

President Joe Biden’s revocation of the March 2019 permit allowing construction of the Keystone XL pipeline will likely result in more crude oil on the rails, industry observers say. How much volume will increase, however, depends largely on the price that heavy crude oil can fetch in the world market. “The cancellation of the Keystone Pipeline project was inevitable when the government switched. Despite its merits or disadvantages, it is now a deflated political soccer ball,” said Barry Prentice, professor of supply chain management at the University of Manitoba and former director of the University of Manitoba Transport Institute. “This means that more crude oil has to be transported by rail. The huge investment in the oil sands is not going to be given up and the oil has to go somewhere.” But crude oil on the rail “was problematic because with the low oil price and the relatively higher price for rail transport, nothing looks very appealing …

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