CN develops technology that could make bitumen transportation safer – The Globe and Mail

Shipping oil by rail has earned a spotty reputation in recent years after a series of train derailments across North America resulted in high-profile explosions and environmentally damaging spills. Canadian National Railway Co. is hoping something the size of a bar of soap can help clean up some of those problems.

Canadas largest railway filed a patent for a new technology on Friday that turns bitumen the heavy crude produced at the oil sands into a mostly solid dry good, by mixing and wrapping it with polymer. In the event of an accident, the packets would not explode, leak, or sink in water, the railway believes.

The invention still has to go through more testing, but the concept could emerge as a niche alternative to current methods of shipping bitumen, which require diluent, a petroleum additive that allows the thick sludge to be pumped into pipelines or rail cars, but also increases the flammability of the product.

Its still early days, so theres a lot of work still to do. First and foremost, we want to perfect the pellet in terms of its shape, its size and the exact composition of polymer that we use in it, said Janet Drysdale, vice-president of corporate development at CN. The pellets, currently in round form, will eventually be produced as flat squares or rectangles, so that they are stackable as a dry good.

We want to do the studies that will prove that it will float in fresh water, salt water, how it behaves in cold and in heat. All of that will be validated with additional lab work.

The polymer-infused crude, which resembles thick jelly if the soap-sized tablets are cut open, is designed to be much less flammable. Its pretty thick stuff, said Ross Chow, vice-president of InnoTech Alberta, a provincially funded organization that worked with CN on the patent.

Success of the invention will depend on whether oil-sands producers and refiners are willing to adopt the technology at a cost that is roughly equivalent to shipping bitumen with diluent now, CN says.

The tablets wouldnt prevent accidents like the 2013 Lac-Mgantic rail disaster, which killed 47 people when an oil train exploded in the Quebec town, since that accident involved highly volatile light oil that resembled gasoline. The technology hasnt been developed for lighter forms of oil, but it could make shipping bitumen and other heavy oil products safer, CN believes.

Nor is the invention seen as a replacement for pipelines, which are the dominant arteries for shipping large quantities of crude. But the technology could give oil-sands producers who lack pipeline access a new way to reach refineries in North America, Asia and other overseas markets.

If spilled into the ocean, the buoyant pellets dubbed CanaPux can be retrieved by vacuuming them up. On land, they can be picked up by hand, or with machinery, CN said.

One potential hurdle to exporting petroleum products through CNs Port of Prince Rupert terminal is the tanker ban that covers the coast of Northern B.C. The ban, announced by Ottawa in the fall, formalizes a long-term moratorium on petroleum ships and is intended to protect the sensitive marine environment from the disastrous effects of large spills. Partially upgraded bitumen is included in the ban, but it isnt clear if CNs bitumen-polymer pellets would be exempt.

To the best of our knowledge, the tanker ban would be applied specifically to liquid hydrocarbons that are deemed to be relatively more risk if there is a spill in a marine environment, Ms. Drysdale said. In terms of the solid bitumen product, it floats, it doesnt leech, and it doesnt dissolve.

Transport Minister Marc Garneau said the technology must undergo testing before the tablets could be exempted as a dry good, but he called the innovation encouraging.

Were making a list of the products that fall within the moratorium ban, and wed have to make a decision on whether that would be excluded from it But theres a lot of homework to do before we establish that, Mr. Garneau said. If it lands in the water, does it remain in solid form, and how easily is it recoverable?

That analysis would be made in conjunction with Environment Canada and Natural Resources Canada, Mr. Garneau said.

Once the pellets reach a refinery, heating separates the bitumen and polymer mixture, along with their polymer casing. The tablets are also designed to absorb the weight of being stacked on each other. It has to handle a lot of different forces, said James Auld, senior manager of corporate development at CN.

Crude-oil shipments by rail rose sharply six years ago, driven by a lack of pipeline space in North America. The increase was spurred by rising petroleum production in new oil fields that lacked pipelines, particularly the Bakken Formation that touches parts of North Dakota, Montana, Saskatchewan and Manitoba.

But the fatal derailment in Lac-Mgantic, Que., awoke the world to the dangers of moving millions of barrels of oil on trains using thin-walled tank cars better suited to canola oil. Despite new rules requiring tank cars be built to better withstand derailments, there have been several fiery train derailments since then, involving a number of different railways.

In early 2015, a 100-car CN train carrying synthetic crude, which is a form of upgraded heavy oil, derailed on a broken track near Gogama, Ont., causing a fire that burned for five days. The Transportation Safety Board released its report on the accident Thursday, calling for better track maintenance, more stringent employee training and stricter rules from Transport Canada on how oil is transported. This accident occurred on an isolated stretch of rail in Northern Ontario, and thankfully no one was injured, TSB chairwoman Kathy Fox said.

The plunge in oil prices over the past two years has since reduced the amount of crude moving by rail, as producers and refiners balked at the cost of rail transport, which can be as high as $22 (U.S.) a barrel in some cases, almost twice that of a pipeline. However, the amount of crude moving by train has surged lately as oil-patch production picked up again, and pipelines fill up. In November, oil exports by rail rose to 120,000 barrels a day, up 20 per cent from the previous year, according to the National Energy Board.

Follow Eric Atkins on Twitter: @ericatkins2

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CN develops technology that could make bitumen transportation safer - The Globe and Mail