Exxon Mobil might build a new rail terminal in Edmonton, Alberta, to move crude oil from its Kearl oil sands project amid questions about whether the Keystone XL pipeline will win U.S. approval.
The plan is a sign of the times. Oil sands producers are increasingly using rail to move growing production as the White House weighs whether to permit TransCanada Corp.’s Keystone project.
An Exxon executive mentioned the potential rail project Thursday on a call with financial analysts to discuss Exxon’s third-quarter earnings report.
David Rosenthal, Exxon’s vice president for investor relations, said the company is hoping Keystone will be built but added Exxon is looking at other options out of “prudence.”
“We are looking at a number of logistical opportunities that we have including pipeline routes and certainly Keystone XL will be there for the industry in general,” he said, according to a transcript on the financial news website Seeking Alpha.
He added: “But as would be prudent we are looking at other options including evaluating a project to build a rail terminal in Edmonton and then move some of that crude out of there into the lower [48 states] by rail and we are in the process of evaluating that opportunity and we’ll have more to say on that in the future.”
The Kearl project began production in April and currently produces 100,000 barrels per day, and Exxon envisions doubling that amount over the next couple of years.
Keystone XL would bring hundreds of thousands of barrels per day from oil sands projects across the border en route to Gulf Coast refineries. It would also move oil from the booming Bakken region in North Dakota.
The New York Times looked in-depth Thursday at growing use of rail to move oil sands crude, reporting that "Canada is poised to quadruple its rail-loading capacity over the next few years to as much as 900,000 barrels a day, up from 180,000 today."