The sight of a locomotive hauling 100,000 litres of light crude oil through a small Canadian town like Lac-Mégantic was nearly unimaginable just a few years ago.
But as North American oil production continues to outpace pipeline capacity, shipment by rail is increasingly common, and critics worry that safety regulations have not kept up with expansion.
In 2012, less than 4% of oil shipped through Canada went by rail to coastal refineries and export centres, but that is still more than triple the 2011 figure. What's more, the amounts are expected to increase significantly in the coming years, according to the National Energy Board.
Rail shipments of oil in Canada have gone from 500 carloads in 2009 to an estimated 140,000 this year, a 28,000%increase, according to the Canadian Railway Association.
As public debate and opposition from environmental groups has stalled the construction of some big pipeline projects from Alberta, such as the proposed Northern Gateway pipeline to B.C. and the extension of the Keystone XL pipeline to the U.S. Gulf Coast, rail companies have increased their capacity to ship oil in an attempt to become bigger players, says Stewart.
Even if all current pipeline projects are approved in Canada, national oil production will exceed pipeline capacity by one million barrels a day by 2025, and that oil needs a way of reaching the coasts.
According to a report by RBC Capital Markets, if the U.S. State Department decides not to expand Keystone's capacity, Canadian oil shipments by rail could increase another 42% by 2017.
At least some of the oil shipped by rail in Canada is not coming from the oil sands, but from the Bakken shale gas formation, a currently booming 520,000-square-kilometre oil and natural gas deposit in North Dakota and Montana, which produces more than 700,000 barrels of oil daily.
The light crude oil on board the Maine, Montreal and Atlantic Railway train that exploded in Lac-Mégantic was en-route from the Bakken reserves to an Irving Oil refinery in Saint John, N.B., the company said on Sunday.
According to one industry spokesperson, producers from the Bakken area are heavily dependent on rail transportation for a number of reasons.
Unlike oil sands developments, which are expected to produce for several decades, oil wells in the Bakken formation only produce for about 10 to 12 years, so it is not always economical or easy to connect them to the existing oil pipeline in the U.S., says Stewart.
Building costly pipeline infrastructure is simply not worth it for the companies developing these wells.
With the oil sands expected to double output, and the Bakken formation to begin producing nearly a million barrels a day within the decade, railway companies have rolled out nearly $1 billion in rail infrastructure investments and placed orders for over 30,000 new tanker cars designed to carry oil.
However, an accident like the one at Lac-Megantic may now put a dent in some of these plans.
The accident in Lac-Mégantic has raised serious questions about the enforcement of railway safety by Transport Canada, especially the transportation of so-called dangerous goods such as oil and toxic chemicals.
In late 2011, the auditor general released a report that concluded, "Transport Canada has not designed and implemented the management practices needed to effectively monitor regulatory compliance" when it comes to the transportation of dangerous goods, as these are defined by the ministry.
Critics also worry that that Transport Canada's lack of progress on this front could have dangerous outcomes as oil transportation by rail continues to expand.
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