In its annual energy outlook, the government predicted this week that rising domestic production and declining demand will likely push prices lower.
According to the Energy Department, domestic oil production over the next few years could return to levels not seen in more than four decades. The D.O.E. expects gasoline prices to fall over the same period to just over $3 per gallon.
U.S. crude oil production is expected to rise by 800,000 barrels per day through 2016 reaching 9.5 million barrels per day -- just 1 percent below the all-time high set in 1970.
The boom in domestic oil production, however, is not without opposition. Some critics say advanced drilling techniques like hydraulic fracturing, or fracking, pose significant threats to the environment. That concern is echoed by others who oppose plans to build the Keystone XL pipeline to funnel black gold from Canada and North Dakota to Gulf Coast refineries.
But it’s doubtful anyone has greater reason to criticize increased production than those who’ve lost loved ones due to the boom in domestic energy production. And this week locomotives rolled through one Canadian town for the first time since 47 people were killed in an oil train derailment.
Big Sky Country exudes natural beauty, and provides a home to wildlife which can elude other parts of the country. But recent sightings have some small town Montana residents worried about the potential of man-made disasters.
Michael DesRosier/Commissioner - Glacier County: "I've noticed in the last three months or so a really large increase in the number of oil tankers that are going through on the railroad."
Memories of the fiery Canadian rail disaster that left 47 dead last summer have residents of Cut Bank, and many other Montana communities saying, “not in my backyard”.
As rail service resumed in Lac-Megantic, Quebec (lock-MAY-gahn-teek, keh-BECK) this week, a federal bankruptcy judge approved procedures to auction off the Maine-based railroad. The sale would allow rail service to continue through the area, but proceeds would be used to repay creditors and supplement the alleged $25 million in insurance payouts for victims of the tragic derailment.
Meanwhile, 100 or more oil tanker cars cruise west daily through the heart of Cut Bank, Montana on their way from booming oil fields in the northern plains.
Charles Farmer/Disaster and Emergency Services -Glacier County: "The chances of a derailment are slim, but if you do have a derailment, it's devastating to the community."
Along with the possibility of spills and explosions, officials across the region have expressed their concern regarding the level of response in rural areas should the unthinkable occur.
Charles Farmer/Disaster and Emergency Services -Glacier County: "Are we prepared to handle something like that? And the answer is no."
The increase of oil tankers in Montana can be attributed to the overall rise of rail commerce dedicated to black gold in recent years. An estimated 400-thousand carloads of crude moved across the country this year, compared with just 10-thousand in 2009. And while the Obama Administration remains tight-lipped as to whether it will greenlight the controversial Keystone XL pipeline, those in favor of TransCanada’s link to the Gulf of Mexico have long seen their mode of transportation as a better alternative to railroads.
Andy Black/CEO – Association of Oil Pipelines: “Right now trains carrying bitumen from the Canadian oil sands are headed to the Gulf Coast. Keystone XL should take many of those barrels off of rails and onto pipelines, which again, are the safest method of transporting them.”
But railroads are quick to point out that 99-point-997 percent of crude oil shipments reach their destinations safely when pulled by an iron horse. And should accidents occur, rail officials ensure they have emergency plans in place.
Patrick Brady/Hazardous Materials and Safety, BNSF Railway: “We spend a lot of time and resources in planning along with prevention.”
The federal government claims it has increased railcar inspections while it ponders tougher safety standards for oil cars. But with increased crude on trains, several other domestic commodities that normally ride the rails have run into a bottleneck.
Record corn and soybean harvests in the Midwest this year are taxing traditional systems used to move grains to market. Following drought conditions of recent years, crop surpluses that could spawn a return to glory are stuck waiting for a ride.
USDA forecasts farm income will soar to a 40-year high in 2013. But the current rail predicament could create a domino effect which drives up export costs and lowers producer profits. That is unless other forms of transportation like trucking and river barges are somehow able to fill the void created by the high demand for rail.