Farmers worried about railroad demand after cancellation of Keystone XL

The spillover effect of US President Joe Biden’s decision to cancel the Keystone XL pipeline is not only felt in the energy sector, but farmers are watching how it will affect rail demand in the long run. I will.

“If the cancellation of the Keystone XL pipeline inevitably increases rail transport by oil, there will be capacity issues. Obviously, we are concerned that we have enough take-out capacity to bring our products to market.” Said United Farmers Scott Bolton, President of Alberta.

A green lighted US project by the Trump administration was designed to carry 830,000 barrels of crude oil per day from Alberta to Nebraska.

Without it, Canadian rail resources would add demand.

“Most oil railroads head north-south to the Gulf Coast … most grain trains head east-west. There is less concern about railroad congestion and competition for crew and resources,” said the Faculty of Public Policy. Executive Fellow Richard Masson said.

The Canadian Pacific Railway and the Canadian National Railway have reported record levels of gain shipments, both adding larger capacity grain hopper cars to the fleet.

“Alberta recorded record yields this year, 8% above the 10-year average. Wheat exports alone increased by nearly 30% in 2020, which is for Alberta farmers. It shows how important railroad capacity is, “said Devin Dreeshen, Minister of Agriculture and Forestry, Alberta, in a statement.

“Oil should be in the pipeline, just as grain is on the train,” Dreeshen added.

According to Masson, the consistency of agricultural products compared to petroleum is in favor of farmers.

“It’s hard for railroads to make money with oil because it’s on and off many times. At least for the last few years. As a grain, you know it comes every year,” Masson said. Said.

“It’s so consistent that railroads have spent a lot of money improving their ability to process grain,” he added.