Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

TransCanada Corporation (TRP), Enbridge Inc (ENB): Pipelines Versus Railroads

Environment

This is challenging.

TransCanada Corporation (NYSE:TRP) President Alex Pourbaix has stated that rail transport is ten times more likely to spill and create three times more greenhouse gasses.

In contrast, Canadian National Railway (NYSE:CNI) has argued the opposite. Their statistics show rail emits 50% less carbon emissions than pipelines and spills less crude oil by volume.

These contradictions highlight the need for more independent research.

According to a recent report by the IEA, pipelines are six times less likely to spill. However, when pipelines burst they’re catastrophic events spilling more oil when they rupture. Rails spill 0.38 gallons of oil per million barrels moved compared to 0.88 gallons for pipelines.

Of course, these statistics are little comfort to environmentalists who are against tar sand development regardless of the transport method.

Winner: Wash

Foolish bottom line

So which one will win out?

The key will really come down to the the difference between the price for Canadian crude and other international benchmarks. Refineries will only pay a premium for rail shipments as long as Canadian crude is sufficiently cheap and southbound pipelines remain clogged. If this spread narrows, railroads will lose market share quickly.

Robert Baillieul has no position in any stocks mentioned. The Motley Fool recommends Canadian National Railway (NYSE:CNI).

The article Pipelines Versus Railroads originally appeared on Fool.com.

Robert is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.