Agriculture sector concerned about increased crude by rail shipments

CALGARY (660 NEWS) — After the province announced a plan to spend close to $4 billion on leasing 4,400 oil tanker rail cars to increase oil shipments out of Alberta, there has been some scepticism.

Premier Rachel Notley hopes they can start putting the cars on the tracks by this summer, and aim to ship around 120,000 barrels per day through a three-year term while pipeline projects like Trans Mountain continue to be held up.

WATCH: City News’ Darcy Ropchan reports on Premier Notley’s announcement to invest $3.7B to move oil by rail.

United Conservative Party Leader Jason Kenney has taken aim at the plan already, saying it is a waste of money and may not be necessary anyway.

Kenney has also written letters to CN and CP Rail saying that if the UCP forms the next government, “we will pursue every means at our disposal to cancel the contracts”.

READ MORE: Alberta Opposition Leader Jason Kenney says he would shelve oil-by-rail deal

Now, a major representative of farmers in Alberta is also expressing its concern.

“This is, at best, a stop-gap measure,” said Tom Steve, General Manager of the Alberta Wheat and Barley Commissions. “Ultimately, we need a pipeline.”

Steve said, unfortunately, the agriculture industry is well-acquainted with backlogs on the railways and there’s some worry that by putting thousand more oil tankers on the railways, grain cars will be pushed off the tracks.

They are still recovering from severe backlogs over the previous couple of years, and this could put salt in the wound.

“Trying to satisfy the demand from one sector and penalizing another sector — that is counter-productive,” Steve said.

Since farmers have few other options to get their product to market — 70 to 80 per cent of crops are exported out of the province, according to Steve — they are already handcuffed by limited options.

“They can’t put it on a truck and send it over to Japan. So, we’re captive to the two rail carriers and we happen to ship our grain over the tallest mountains in the world. This is a problem that has been going on for decades.”

It has largely been because of logistical challenges that have caused these shipping delays, including cold weather as well, but this time the issue may be caused by the government’s decision.

“We’ve had two major derailments in western Canada in the last few weeks. So, it all adds up. To just expect that you can wave a magic wand and add additional strain on the system, it’s more complicated than that and we would like to see a more comprehensive plan than we see today,” Steve added.

With more oil on railways, he is worried the idea may present safety and economic issues, and unintended consequences may not have been considered.

“The government has leased the cars, but you also need engines and crews and logistics to be able to execute on those plans, and we haven’t seen those yet.”

Premier Notley assured that CN and CP Rail promised agriculture shipments would not be sacrificed by adding in more oil tankers, but Steve said they are not so confident about it.

“We would just like to see a lot more dialogue with the agriculture sector, than simply telling us that everything is going to be great.”

Overall, Steve said they don’t want to see the oil and gas sector continue to struggle — which is why he stresses the need for pipelines — but they also don’t want to be paying a price.

“We sympathize with the oil industry, but we have serious concerns about whether or not this plan is actually workable.”