By Collin Eaton

Protestors may have slowed the Dakota Access Pipeline.

But the nation’s vast railroad network, and its foray into transporting crude oil since the shale boom began, likely meant investors had to make the controversial pipeline smaller than it could have been, researchers say.

Even though it’s more expensive, carrying oil on rail lines rather than on pipelines has some advantages that could keep pipeline investments smaller in the future, according to a new study by two professors at the University of Chicago.

If the cost of putting oil on the rail lines had increased by just $1 a barrel, for example, the Dakota Access Pipeline could have had an additional daily capacity of somewhere between 29,000 and 74,000 barrels.

That correlation comes as rail transportation has become a more flexible option for oil companies than pipelines, which require companies to sign shipping contracts of a decade or longer. Crude by rail levels lag oil price movements by only six months to 18 months.

“It doesn’t mean pipelines are going away, but now that rail is a thing, it puts a constraint on how willing you are to build a pipeline,” said Ryan Kellogg, a University of Chicago professor and researcher at the university’s Energy Policy Institute…

Continue reading at the Houston Chronicle…

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Areas of Focus: Energy Markets
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Energy Markets
Well-functioning markets are essential for providing access to reliable, affordable energy. EPIC research is uncovering the policies, prices and information needed to help energy markets work efficiently.
Fossil Fuels
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Fossil Fuels
Under current policies, fossil fuels will play an important role in the energy system for the foreseeable future. EPIC research is exploring the costs and benefits of these fuels as...
Transportation
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Transportation
Mobility is central to economic activity. Yet, a lack of fuel diversity and continued demand growth have made the transportation industry a major contributor to global pollution and carbon emissions....