Infrastructure

HOUSTON – A senior Exxon official said the oil industry sees rail cars as a viable option to move growing amounts of Canadian oil sands to market, but he called development of multiple new pipelines the preferred option.

“When we look at long-term forecasts of oil sands growth, we believe that all of these pipelines will be needed over time to support the oil sands,” said Bruce March, an Exxon vice president, noting multiple proposals to build pipelines to the U.S. and other markets.

“The fact is that pipelines remain safest and most reliable way to transport crude oil and petroleum products,” said March, the former CEO of Exxon’s Canadian subsidiary Imperial Oil.

But March, speaking at the IHS CERAWeek energy conference here, said that while the industry wants pipelines, railroads are a viable option to handle growing production.

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Transportation Secretary Ray LaHood derided the looming sequestration cuts as a "dumb idea" that "will not work" and said they would undermine the nation's transportation system.

LaHood made the remarks in a speech to the American Association of State Highway and Transportation Officials (AASHTO), which released his remarks on Thursday.

"Sequester is a dumb idea," LaHood said to the group. "It's a meat-axe approach. It will not work in us reaching our goals to improve America's transportation." 

At the end of his approximately 18-minute speech, LaHood urged the group to lobby lawmakers to reach a last-minute agreement to avert the $85 billion in across-the-board budget cuts that are scheduled to take effect on Friday.

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President Obama's warnings about deteriorating roads and bridges are overblown, according a study released Thursday by the libertarian Reason Foundation.

Obama has referenced as many as 70,000 “structurally deficient” roads that are currently in use as part of his push to convince Congress to approve $50 billion in new transportation spending to boost the national economy.

But the Reason Foundation said conditions on roads that are maintained by states have actually improved in recent years.

“President Barack Obama's new infrastructure plan calls for spending $40 billion on ‘urgent upgrades.’ But a new Reason Foundation report examining 20 years of state highway data finds the condition of America's state-controlled roads has improved in seven key areas including deficient bridges and pavement condition," the foundation said in a statement on the study, dubbed “America’s Roads and Bridges are Not Crumbling.”

The National League of Cities has expressed concern that President Obama’s renewed call for infrastructure spending could put the current tax exemption for municipal bonds in danger.

Clarence Anthony, the group’s executive director, said in a Wednesday statement that the league supports the White House’s broader goal of repairing the nation’s bridges and roads.

But Anthony wasn’t as positive about the administration’s push for an infrastructure bank, or its idea of modeling a new America Fast Forward bond program after the Build America Bonds that paved the way for billions of dollars of stimulus-related projects.

“A poorly funded bank would be no substitute for municipal bonds,” Anthony said in his statement. “If infrastructure investments are to encourage job creation, there must be a robust municipal bond market.”

The Pennsylvania Republican said Wednesday that a one-time infusion of cash would not solve the larger deficit in funding.

President Obama on Wednesday renewed his call for Congress to spend $50 billion to improve the nation's roads and infrastructure. 

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