Photo credit: Flickr/laurigorham

Environmentalists are fighting hard to prevent TransCanada Corporation (TRP 0.86%) from ever building its proposed $5.3 billion Keystone XL pipeline. The hope is that if the pipeline is never built then it can never burst and spill dirty Canadian oil on American soil. The problem with that concept is that America is still addicted to oil, and, as with every addiction, where there is a will, there will always be a way.

In hindsight it now appears that environmentalists made a major blunder in not allowing that pipeline to be built. America has not only found other ways to get Canadian oil into the country, but it found a way around its own pipeline bottlenecks created by the Bakken oil boom. These new modes of transportation actually pose far more dangers to the environment than TransCanada's Keystone XL pipeline.

Train wreck
One of the ways America is getting around its pipeline bottlenecks is to put more crude oil on America's railways. That has enabled companies like Berkshire Hathaway subsidiary BNSF to transport thousands of barrels of oil per day. In fact, Berkshire Hathaway is handling a lot of the Bakken crude oil volumes that would have been transported by TransCanada's Keystone XL pipeline. That's because the Keystone XL was to transport 100,000 barrels of crude oil each day from the Bakken to the Gulf Coast. Now, that oil is being hauled by Berkshire Hathaway.

While shipping crude oil by rail is relatively safe, there is a big risk of large disaster. That explosive risk was just realized last week, when a Berkshire Hathaway owned BNSF train derailed in North Dakota.

The BNSF derailment caused 2,000 North Dakota residents to evacuate the area around the derailment because of the dangerous fumes from the fire that resulted from the incident. While the damage wasn't major, this incident was just the latest in a string of train derailments over the past year, the worst of which was the tragedy in Canada which took the lives of 47 people. As more crude oil gets shipped by rail, the risk of another disaster only intensifies.

A sinking feeling
Rail, however, is just one of a growing list of problems for environmentalists who oppose the Keystone XL. Shippers are looking at every way to move oil, with the latest proposal being to transport it on a barge through the Great Lakes. This latest project comes from Calumet Specialty Products Partners, L.P. (CLMT -0.25%), which is planning on upgrading a dock in Lake Superior to load Canadian bitumen onto barges and ship it through the Great Lakes.

What's worrisome here is that unlike conventional oil, Canadian bitumen is heavier than water, making its clean up difficult as it would sink. Just imagine the environmental disaster if one of these barges sunk in the Great Lakes. The fact the lakes provide drinking water to more than 40 million people makes this proposal all the more risky.

Final thoughts
Canada has the third largest reserves of oil in the world. We need that oil in order to end our ties to OPEC, which is why Canada's oil will be produced and make its way out of the country. The only question is if it will continue to be shipped on riskier trains and barges, or if environmentalists will realize their blunder and back off their opposition to the much safer Keystone XL.