Exxon official: Pipelines preferred, but railroads a viable option to move oil sands

He said that there will be sufficient
rail car capacity in 2015 to transport as much oil as the Keystone XL pipeline is projected to carry.

“Our
industry is mitigating risk and trying to make sure that the oil sands
grows as unencumbered as it possibly can,” he said in touting rail’s
ability to move production from Alberta’s oil sands projects.

Railways already handle some oil sands. But asked if rail transit can support the long-term growth of oil sands production, March said, “I don’t know that for sure.”

At the same conference, ConocoPhillips CEO said the industry will eventually need new pipeline capacity for the oil sands.

In addition to Keystone, companies are proposing other projects, including Enbridge Inc.’s proposed pipeline that would carry oil sands west to the British Columbia coast for export.

“Some of them have to happen or the growth will slow down,” ConocoPhillips CEO Ryan Lance told reporters.

Meanwhile, environmental groups are pressuring the White House to reject the Alberta-to-Texas Keystone XL oil sands
pipeline as oil and-gas companies push for that project and others like it.

Canadian oil sands production is currently 1.8 million barrels per
day, according to Jackie Forrest, a senior analyst with IHS CERA, the
research and consulting company holding the conference.

Production
is expected to reach 3.2 million barrels per day in 2020 and 5 million
barrels per day in 2030, according to the Canadian Association of
Petroleum Producers.

The extent to which TransCanada Corp.’s proposed Keystone project will foster expanded development of Canadian oil sands is at the heart of the battle over the project, which is under Obama administration review.

Green groups say the project would worsen climate change by serving as a catalyst for carbon-intensive growth of oil sands production.

But a draft State Department report released last week dealt a tough blow to their efforts by concluding that the fate of the Keystone pipeline will not have much effect on the rate of future oil sands production.

— Updated at 10:06 a.m. and 11:02 a.m.