A tragedy in Canada could be the key to breaking the political standoff surrounding the TransCanada‘s (TRP) proposed Keystone XL Pipeline.
On Saturday, a train carrying thousands of gallons of crude oil to a refinery in New Brunswick, Canada, derailed and exploded near the Quebec town of Lac-Megantic. More than 2,000 residents had to be evacuated. At least five people are known to have been killed in the accident, Bloomberg notes.
The incident has renewed debate over the safety of transporting oil by rail. The Keystone XL pipeline, which would deliver 830,000 gallons of oil to the U.S. every day, has been strongly opposed by environmentalists. U.S. President Barack Obama’s administration has so far withheld approval to build the pipeline.
With approvals for the Keystone XL and another pipeline in British Columbia still up in the air, oil producers will have little choice but to ship more oil via rail. If the Keystone XL pipeline is not approved, rail shipments of Canadian oil are expected to climbed 42% within four years.
However, the Natural Resources Defense Council, which opposes the Keystone XL, said that rail transport of oil will grow regardless of whether the pipeline is approved.
If the pipeline is not approved, the Burlington Northern railroad, owned by Berkshire Hathaway (BRK.A, BRK.B) would stand to benefit from increased oil shipments.