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All right let's talk about this deadly -- train crash is raising questions about the future of oil policy in the US and Canada the derailment highlighting the risks involved calls for the increase in.
All related train traffic over the past ten years.
This also comes at a critical time in the debate over the Keystone Pipeline.
Joining us now to discuss everything as well as John -- -- the former Shell Oil president of the found -- a CEO of citizens for affordable energy John thanks for joining us.
A lot to talk about let's begin with what we've seen it in Canada -- -- accidents.
Involving this runaway train essentially.
-- does this have any impact on the debate over whether it's safe to transport crude by -- rail by pipeline.
Well I think the experts would say that one of the reasons we have so many pipelines.
In this country.
Moving petroleum products as well as crude oil.
Is the fact the pipelines are generally safer.
If you maintain pipelines.
If you designed pipelines properly install them properly.
They do not have the ongoing mechanical.
Issues that -- -- does.
Rail is quite useful rail can transport many many things.
But as we saw here over the weekend rail accidents can be devastating.
Tragedies and when people die what happened town -- burned down.
Railroads go through towns pipelines generally do not go underneath towns.
They avoid towns so all of them all of all pipelines are more economical.
I believe there's safer I believe they transport oil more efficiently and I think that the debate of rail vs.
Pipelines it is really never gonna end because there are different people and have different views.
Do we have the infrastructure in place for the amount that's being transported both on the rail side and the pipeline side.
Well now we don't have enough infrastructure period and we don't have -- -- rail infrastructure to move the -- quantities of oil.
And frankly I think it's unlikely to build enough.
In a timely way but we also don't have the infrastructure for pipelines one of the reasons we're paying so much for oil.
On the issue of the keystone now pipeline -- clerical help this debate -- -- -- -- you could argue that overall it just shows that this.
A difficult or it can be a potentially dangerous thing to be transporting crude even by.
Pipeline does this -- help that the in the case for the Keystone Pipeline.
Well it's certainly a graphic and tragic case to be made for pipelines.
But pipelines also have accidents as we saw in Little Rock, Arkansas -- nobody died there was no fire but there was an ugly mess.
-- north of Little Rock issues and so pipelines can create problems especially when they're old.
But but once again I think that.
The experts know that whenever hydrocarbon is being transported.
There will be risk.
But if we want to drive cars we're gonna have to let us accept a certain amount of risk.
And then the -- the safer we can make.
The risk oriented rail or pipeline the better off we are.
Mention driving -- just talk about the price is right now WTI -- a 102 dollars a barrel now I guess.
Because of what was seeing in Egypt and the repercussions that could have in the region Tom -- you see prices going from here.
Saying the next step -- and by the end of the year.
Well I think we'll see them incrementally higher but not substantially higher unless.
And this is a big unless.
Unless this Shia Sunni divide in the region gets worse.
Rather than better.
If it gets worse it could spread migrate across the region.
Little pop ups could occur anywhere in the region where Sunnis and Shia try to live together.
And I think what the west under estimates.
And I got this loud and clear last week when I was in Saudi Arabia can.
The west under estimates.
The enormous tension that has built up in the region.
Particularly driven by Iran and Iran -- efforts to unsettle the west.
Between the Sunni and the Shia.
And this is a historic.
Period of tension.
Taking us back many many decades centuries even.
To what is a -- rivalry that has always been there.
And so if we have unsettled.
This -- -- and for example opened pandora's box this could have huge volatility.
On the oil price particularly if we see tension spread further across the region and that's something that Iran would love to see John quickly you're in Saudi Arabia is was there any talk about the increase in a loyal crude output here in the US and what that means ultimately for Saudi Arabia.
I was there to speak to them about that that -- increase.
So that they could learn more about it and and make whatever steps -- decisions they need to make.
They're very impressed with what the US has been doing they would be even more impressed -- the US government actually got behind the efforts to increase domestic production.
And then so that we could truly see a dramatic turnaround they love to see a strong economy because a strong economy in the US means more demand for oil and they're there to serve the world's.
Oil because they have so much of -- very interesting stuff as always John how -- sue -- citizens for affordable energy thanks so much for joining us.
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