CALGARY, Alberta, Sept. 4 (UPI) - Calgary investment company Peters & Co. said it predicts heavy investments in oil-by-rail in western Canada but wonders if it's enough.
The company said investments in new oil rail terminals in the west of the country will approach $6 billion during the next two years.
Oil companies are turning to rail because pipeline capacity in North America is not enough to keep up with production gains. Rail capacity from western Canada is expected to increase from 200,000 barrels per day to 500,000 barrels per day during the investment scenario, the Platts news service reported Tuesday.
"A key question is whether the pace of growth can continue as rapidly as required," Platts quoted the report as saying.
New pipelines, like TransCanada's (TSX:T.TRP
, Stock Forum
) planned Keystone XL project, should help move a substantial amount of oil throughout North America, though Peters & Co. said the oil industry is expected to move forward with rail shipments while at the same time overhauling refineries and existing pipelines.
Keystone XL faces criticism about the environmental impacts tied to Canada's heavier type of oil sands crude oil. U.S. President Barack Obama has said he'd weigh the national interest of the cross-border pipeline against its environmental footprint.
U.S. regulators last week said they were investigating the safety of delivering oil by rail. At least 40 people were killed in Lac-Megantic, Quebec, in the early July derailment of a train carrying tankers of crude oil from North Dakota to Canadian refineries.