Oil shipments by rail likely won’t interfere with grain movements

WINNIPEG – When considering the pattern of how grain is shipped by rail in Canada, it’s very unlikely increased oil shipments would interfere, according to Quorum Corporation.

“That’s largely because the flow of grain is predominantly to the West Coast and Thunder Bay,” said Quorum President Mark Hemmes.

He explained approximately 80 percent of Canadian grain is exported through Vancouver and Prince Rupert in British Columbia and Thunder Bay, Ont.

“The other 20 is going either to Eastern Canada or down into the United States,” he continued.

However Hemmes acknowledged there is a possibility of increased oil traffic could adversely affect grain shipments to the U.S.

“The oil is looking to go predominantly to the Gulf Coast, some goes into the Mid-West and a little bit goes to the East Coast,” he said.

Also, should oil shipments begin to focus towards Canada’s West Coast that as well could pose problems.

“Right now I don’t think that’s in cards, but who knows with 7,000 cars added. Given that Alberta oil is trading at a less than optimum level, some people may see that as a cheap alternative to buying more expensive product elsewhere. But right now, it’s not a concern,” Hemmes stated.

As part of the province of Alberta’s plan to assist its struggling oil industry, the government is acquiring 7,000 rail cars along with a sufficient number of locomotives to transport 120,000 barrels of crude oil per day.

Hemmes said grain shipments have largely been very good so far this winter, although Canadian Pacific Railway had a couple of delays.

“They had a derailment in the Macdonald tunnel and pretty heavy snowfall through the Rockies and to the Cascades. So they had some delays for about a week,” he said, noting CP has recovered.

“Other than that, knock on wood, things have been really good this winter,” he quipped.

Vancouver’s bout with rain of late has slowed the loading of grain onto vessels, but such hasn’t posed any major problems, according to Hemmes.

“(It’s) been quite a few years since any terminal in Vancouver has gotten so full of grain that they could not unload rail cars,” he said.

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