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The devastating firestorm that wiped out the heart of Lac-Mégantic is a catastrophe for everyone – the victims, their families and the town – and for Canada's reputation as a responsible environmental player. It is our version of the BP oil disaster in the Gulf of Mexico, a horrific accident that was probably caused by a cascade of human error, negligence, flawed or non-existent backup systems, insufficient oversight and incredibly bad luck. Compared to the Gulf spill, the environmental damage will be relatively minor. But the human toll will be far worse. This promises to be the deadliest energy-industry accident in years.

Some people, grasping for a silver lining, argue that the Lac-Mégantic disaster will be a boost for pipelines, including Keystone XL. I don't think so. It's bad news for the entire oil industry. The overwhelming message to the public is that regardless of how the stuff is transported, the industry can't be trusted to keep us safe. The squabbling, buck-passing and finger-pointing that broke out in the wake of the crash have hardly helped. The head of the railroad, Edward Burkhardt, has come across as the evil face of capitalism. He gives the impression that he cares more about his own skin than about the dozens of people incinerated in the crash. Whoever is to blame, the furious, grieving citizens want heads to roll – and they are right.

Big Oil's environmental foes will use the horrific scenes from Lac-Mégantic to make the case that fossil fuels aren't just bad for the atmosphere, but inherently lethal. They also have a new propaganda weapon to reinforce their argument that Canada, an energy superpower, is too close to the oil industry and too lax about oversight.

Environmentalists are probably right that oil transport by train needs tighter regulation. There are simply too many red flags here. How can a 73-car train hauling hazardous material be left unattended overnight? Are the railroad industry's ancient tanker cars too primitive for modern safety demands? Have we cut too much slack for small, short-haul outfits like the Montreal, Maine & Atlantic Railway?

These questions are now urgent. Rail transport of oil has greatly increased, and railways go through towns and cities. The pipelines may be safer, but they're full. And even if they weren't, rail is the most efficient way to transport the vast new supplies of shale oil that are being unlocked from formations such as North Dakota's Bakken field. Unlike the oil sands, these sites give out after a few years, so permanent pipelines don't make sense. Almost three-quarters of Bakken oil now goes by rail. The train that destroyed Lac-Mégantic was hauling Bakken oil to a refinery in New Brunswick.

Environmentalists are also using this disaster to argue that the sooner we wean ourselves from killer oil, the better. But this is where their arguments go off the rails. Like it or not, the world will be dependent on fossil fuels for a long time to come. Renewables such as wind, solar and biofuel can't possibly provide more than a tiny fraction of our energy needs, and their costs are prohibitive. After many years of heavy investment in renewable technologies, governments and industries everywhere are in retreat. For all the billions they've invested, they have next to nothing to show. Even if we achieve much better energy efficiency, the world's energy needs – and its need for fossil fuels – will be soaring for decades. Anyone who tells you that sun and wind can replace our need for oil and gas any time soon is wrong.

Back in the real world, there are no perfect answers. There are only tradeoffs, some better and some worse. New, improved technologies will help improve safety. Strong, effective regulations are essential. But ultimately, we'll still have to figure out how much risk we want to tolerate. Responsible environmentalists can help us do that. Too bad so many of them live in fantasy land.