Tuesday, July 1, 2014

Grains, Rails, and Regulations.

British Columbia agreed to join confederation if it would be provided rail access to the East.  They would be the last province to join Canada until Newfoundland figured out they were missing out on a great time.
So,

I have wanted to write about trains for a while, so expect this to be a long and rambling post fueled in equal parts by coffee, home brewed beer, excitement for Canada's 147th birthday, and Oxford commas.  A nation as large and diverse as Canada presents a special challenge for finding unifying themes that do not involve federal policy or apologising.  So I choose today to write about a technology that has unified our great nested nations, rail.

I can only imagine that you, dear readers, wearing your special Canada Day (or vintage Dominion Day) top hats and monocles, are wondering whether rail really is important in our present day.  I can tell you that for a great deal of people, it most assuredly is.  Ignoring the obvious arguments regarding the jobs involved in rail, many rural Canadians were supremely irked by rail service in the spring of 2014.  Many CBC Radio One listeners might remember the call in shows, or perhaps you spent time in a rural coffee shop (i.e. Tim Horton's.  Yes, I mean i.e. and not e.g.), around that time, and you listened to the exclamations that the railroads and/or Government hates farmers.  Last year, the prairie provinces had a wet summer that led to higher-than-average grain crops when a record harvest was already anticipated.  It ended up exceeding expectations by a third (which, in this case, represents excess millions of tonnes of grain).  It appears that from reviewing the relevant news coverage, when the harvest came in for the fall of 2013, there was so much grain that farmers waited for prices to go up before selling to the elevators.  What followed was what has been termed a "rough winter."  During inclement weather, railroad operators operate at 70% capacity to ensure that adequate braking can be provided by the locomotives on potentially icy rails, meaning that the shipment of grain was slowed even further.  Come spring, elevators collectively faced with teragrams of grain began to panic ever so slightly.

It was at this point that the Federal government decided to step in.  For better or worse, an Order-in-Council was passed requiring both CP and CN railways to ship 5000 cars worth of grain each per week or face $100,000/day fines, along with temporarily loosened regulations to allow more freedom to transport grain.  Coincidentally, this is almost exactly the same excess capacity that the rail companies had in the fall of 2013 before the harsh winter set in.  The CEOs of the respective companies warned of bottlenecks when the grain arrived to port.  I have not seen coverage of what ultimately happened, but the takeaway message here is that even today railways can evoke very strong feelings.

The view from the apartment in Calgary, looks like coal headed East.  It's interesting to note that I moved to an apartment a five minute walk from a CP Rail line.
Adjusting your monocle, I imagine you, most attractive and intelligent reader, are wondering why rail is such a big deal, why on Earth it would evoke such strong emotions.  The reason is simple: trains are ridiculously efficient.  There is simply no more efficient method of transporting freight over land than with trains.  For this reason, 11000 km of rail are currently re-creating the Silk Route in order to create a trade link between China and Germany.  Why?  When an entire train is considered, one liter of fuel will carry one ton of stuff for 185 km.  There is simply no better way of moving masses of stuff over land than by rail.  This is, of course, why grain farmers in Canada get so upset when they cannot ship by rail.  Without that efficiency, it would not be worth transporting.  In an interesting note, the method by which this fuel economy is achieved is fascinating.  In the case of CP rail anyway, a traction diesel-electric hybrid is often employed.  In this method, a diesel engine is operated at its optimal rpm, this energy is converted to electricity and is used to run an electric motor at very high efficiencies.  It's similar to the shockwave engine that MIT thinks will revolutionise passenger vehicles by exploiting high-efficiency combustion engine operation coupled to already efficient electric motors.

Naturally, low transportation costs mean that a variety of valuable goods will be shipped via rail.  Especially when commodity prices are high and no other viable methods of transportation exist, rail freight will be considered as a transportation option.  This is why oil transportation by rail has skyrocketed in Canada in recent years.  Whereas pipelines are facing stiff opposition from environmentalists and the politicians who represent them, oil companies can profitably ship their product by rail if necessary.  Being in the [strong and] free society that we are, it is the right of the company to operate this way.  And, considering that publicly traded companies have a legal obligation to maximise profits, they will.  Despite accusations from grain farmers that rail companies only care about oil and not farmers, it becomes an economic necessity to ship oil by rail where no other options are available.

As a result of the high price of oil, increased production/shipment, and deregulation, things will go wrong.  The disaster at Lac-M├ęgantic, in my opinion, is a prime example of why deregulation doesn't work.  When companies are allowed to police themselves, and they are also required to maximise profits, it creates a conflict of interest and independent review is crucial to safe operation for the benefit of both the operators and the citizenry.  It's also important to remember that Canadian pipelines are a comparatively (to different shipment methods and the pipelines of other countries), safe mode of oil transportation.  The demand for oil is not decreasing, and companies will ship a valuable product by any means necessary.

So, trains, eh?  When the Pacific and Atlantic Oceans were bridged in Canada in 1885, I'm not even sure what the primary shipments would have been, though lumber, grain and coal seem likely candidates.  It was the promise of a rail link that brought British Columbia to Confederation, and the railways helped build the country.  Today they continue operating, linking manufacturers, farmers, and their ilk to port cities and international markets.  Ontario currently has plans to establish a rail link to the Ring of Fire so that mines may be opened and the region developed economically.  And, given the efficiency of the mode, rail will continue to be an integral part of Canada's sustainable development.

NM

P.S.  Now if only we could get trains to run on syngas or methanol...
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