A company wants to expand its rail facility southeast of Edmonton so it can load more trains with Alberta crude for shipment across North America.
USD Terminals Canada says its rail terminal near Hardisty, Alta., can already load up to two trains each with 120 railcars a day.
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The Canadian Environmental Assessment Agency says USD is proposing to double that capacity by building and operating new rail tracks and loading infrastructure.
"As proposed, the Hardisty Rail Terminal Project would allow the existing facility, which currently transloads light crude oil from pipeline to railcar, to handle a wider variety of products such as propane, butane, and heavy crude oil," the agency says on its website.
"The facility's loading capacity would also increase, going from two to four 120-car trains per day and allowing shipments to be brought in by truck."
The federal agency says it is determining whether an environmental assessment is required.
It is inviting public comments until the end of the month on the proposal and what it calls its "potential for causing adverse environmental effects."
USD officials were not immediately available for comment.
CP line can connect to key markets
The company's website says its Hardisty facility, which began operating in June 2014, is connected to a main Canadian Pacific Railway line that has the ability to connect to all the key refining markets in North America.
A report submitted by USD to the agency says the expansion is needed to "continue to provide a supplemental method to pipelines for delivering products to market and to reduce transportation constraints of oil products in a cost effective and environmentally responsible manner."
On Friday, U.S. President Barack Obama rejected TransCanada's proposed Keystone XL pipeline expansion, which would have handled nearly one-quarter of all Canadian oil exports to the United States.
The line would have shipped bitumen from Alberta's oilsands through a pipeline hub in the Hardisty area to U.S. Gulf Coast refineries.
Keith Stewart of Greenpeace said Ottawa should absolutely conduct a full environmental review of the USD proposal.
"Moving oil by rail is one of the most dangerous activities we undertake in Canada right now, and there has never been any kind of assessment done of it by the federal government," he said.
"We will be making a submission arguing in favour of such an assessment. I cannot see how the Trudeau government cannot bump this up to an environmental assessment."
The report submitted by USD calls for the rail facility to be built in stages. Construction would begin on Jan. 1 with startup on the first stage on May 1.
Work on subsequent stages would begin next year and be completed by December 2016.