Category: Railroads

Source: U.S. Energy Information Administration, based on Association of American Railroads Note: These carloadings do not include intermodal traffic. U.S. rail traffic, including carloadings of all commodity types, has increased 4.5% through October 2014 compared to the same period in 2013. Crude oil and petroleum products had the second-biggest increase in carloadings through the first 10 months of this year, with these shipments occurring in parts of the country where there is also strong demand to move coal and grain by rail. In response to shipper concerns over the slow movement of crude oil, coal, grain, ethanol, and propane, federal regulators are closely tracking service among the major U.S. freight railroad companies. Rail carloadings of oil and petroleum products totaled 672,118 tank cars during January-October 2014, 13.4% higher compared to the same period last year, according to the Association of American Railroads (AAR). Rising U.S. crude oil production, particularly […]

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Bakken crude oil output responsible for increase in rail deliveries, U.S. report finds. (Photo: Daniel J. Graeber) Crude oil production from North Dakota is more than the U.S. pipeline network can handle, forcing refiners to use rail, a federal report said Thursday. The Energy Information Administration said in a daily briefing the amount of oil and petroleum products shipped on the U.S. rail system increased more than 10 percent year-on-year. "Rising U.S. crude oil production, particularly in North Dakota’s Bakken shale formation, where pipeline takeaway capacity is limited in moving the state’s growing oil volumes to market, is one of the main reasons for this increase in rail shipments of petroleum and petroleum products," EIA said in a daily briefing. North Dakota’s government said oil production in August , the last full month for which data are available, was 1.13 million barrels per day, an all-time high. More than […]

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Regulators set to decide on crude-by-rail shipping rules are relying on testing methods that may understate the explosive risk of the crude, according to a growing chorus of industry and Canadian officials.  The Continue Reading

Surging railroad tank-car orders at companies owned by billionaires Warren Buffett and Carl Icahn are defying an oil price drop that threatens to slow the U.S. drilling boom. Even with crude falling to a post-2011 low, manufacturers including Buffett’s Union Tank Car and Icahn’s American Railcar Industries Inc. (ARII) can’t meet demand. The order backlog reached an all-time high last quarter after bookings for 42,900 freight and tank cars, the most in 27 years of data compiled by Bloomberg. Producers such as Greenbrier Cos. (GBX) and Trinity Industries Inc. (TRN) are expanding as buyers seek more tank cars to move surging oil shipments and get ahead of a U.S. regulatory decision that may take thousands of units already in use off the tracks. The order buildup will ensure a good 2015 no matter where oil goes, said Michael Baudendistel, a Stifel Financial Corp. analyst. “Deliveries will be sustainable for […]

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Seattle and Tacoma are being stymied in their push to regain market share from Canada as railcars destined for the harbors sit idle on tracks across the U.S. Pacific Northwest. Even as the ports, on Washington’s Puget Sound, agreed to consolidate some operations after a century of competition, 40-fold growth in shipments of crude from the Bakken oil fields is straining the region’s main railroad company, BNSF Railway Co., causing delays that have helped shift traffic to less congested harbors in Canada. In September, as many as 150 grain cars piled up in nearby rail yards, said Dale Frazier, manager of Seattle Bulk Shipping Inc. “We were turning away business,” Frazier said by phone on Oct. 28. His company transfers grains, peas and lentils from hopper railcars into containers for export. His customers racked up $170,000 in extra storage bills in September, up from $30,000 in July, he said. […]

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BNSF Railway Co. (BRK/A) plans to apply a $1,000 surcharge for each older tank car that hauls oil, as the railroad owned by Warren Buffett ’s Berkshire Hathaway Inc. encourages shippers to scrap the puncture-prone cars. The charge, which will take effect Jan. 1, will add about $1.50 a barrel to the cost of shipping oil across the country. It’s the first one announced by a major U.S. railroad for older cars known as DOT-111s, and won’t apply to cars called CPC-1232s that are built to higher standards adopted in October 2011, according to a BNSF notice. The Obama administration in July proposed phasing out thousands of the older tank cars within two years and lowering speed limits as part of new rules to reduce the risk of hauling crude by rail. The plan followed a series of fiery accidents, including the derailment and explosion of a crude train […]

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Sen. John Hoeven, R-N.D., calls for quick action on rules governing oil transit by rail. UPI/Kevin Dietsch BISMARCK, N.D., Oct. 7 (UPI) — The Department of Transportation needs to finalize best practices to ensure the safe transit of crude oil by rail, Sen. John Hoeven said from Bismarck. Hoeven, R-N.D., was on hand for the launch of a rail safety session , hosted by rail companies GATX Corp. and BNSF Railway. Since December, Hoeven said he’s been meeting with Department of Transportation and Pipeline Hazardous Materials Safety Administration officials to discuss rail transit. "We continue to push DOT to finalize effective and practical rules for tanker car construction so tank car owners like GATX have the certainty they need to upgrade their fleets, which is a vital part of the effort to make rail transport safer," he said during the Monday launch of the session. The PHMSA issued a […]

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API says federal proposals on oil train safety could cost consumers billions of dollars. UPI/Kevin Dietsch WASHINGTON, Oct. 1 (UPI) — The American Petroleum Institute said federal proposals for safer transit of oil by rail are not feasible, though its program can provide a reasonable solution. API said proposals outlined by the U.S. Department of Transportation for safer oil transit could stifle North American crude oil production . "We have instead proposed an aggressive yet achievable program for retrofitting the crude oil fleet to get stronger cars onto the tracks as fast as possible while limiting the most adverse economic consequences for consumers," API President Jack Gerard said in a Tuesday statement. API said it was proposing a railcar with walls about 1/16 of an inch less than the federal guidelines for rail cars carrying crude oil. The Department of Transportation in July called for the elimination of older […]

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Coal competing with oil and gas for space on rail In 2010, Chuck West, manager of coal procurement for one of the country’s largest power generators, American Electric Power, rode a train down from the coal fields of Wyoming to Denver. Out the window, he took note of the many empty coal cars parked along the tracks. Coal shipments have been on the decline since 2008 as low gas prices invigorated coal-to-gas switching at power plants. In 2008, coal reached a 20-year peak in railroad shipments. By 2013, it was at the lowest point during the same period of time. Last winter, when AEP was getting low on its coal supply, Mr. West thought back to that trip. Unlike some other generators facing a coal shortage because they couldn’t get the fuel delivered in time, AEP squeaked by on its reserves. “But it was a long three months,” he told […]

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An oil-train derailment near Casselton, N.D., last December helped spur proposed new safety regulations. Zuma Press Oil companies and railroads have united to fight some proposed federal rules on oil-train safety after a year of pointing fingers at each other over explosive accidents. Industry groups representing railroads and energy companies on Tuesday told the U.S. Transportation Department that they need more than two years to build safer railcars to haul crude. The department’s Pipeline and Hazardous Materials Safety Administration in July proposed safety rules for oil trains that would create new standards for tank-car brakes, other components, speed limits and special routes around populated areas. The department’s proposals also seek to scrap some of the oldest railcars while upgrading others. The proposals were in response to a series of oil-train accidents that began in July of last year with a derailment and fireball in Lac-Mégantic, Quebec , which killed […]

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AP Photo/Paul Chiasson WASHINGTON (AP) — The oil and railroad industries are urging federal regulators to allow them as long as seven years to upgrade existing tank cars that transport highly volatile crude oil, a top oil industry official said Tuesday. The cars have ruptured and spilled oil during collisions, leading to intense fires. Jack Gerard, president of the American Petroleum Institute, told reporters that his group and the Association of American Railroads are jointly asking the Transportation Department for six months to 12 months for rail tank car manufacturers to gear up to overhaul tens of thousands of cars and another three years to retrofit older cars. The two industries, at odds until recently over how best to prevent oil train collisions and fires, also want three years after that to upgrade newer tank cars manufactured since 2011, known as "1232 cars," he said. The Transportation Department is […]

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American Petroleum Institute issues policies it says will help ensure safer oil transportation by rail (Photo: Daniel J. Graeber) WASHINGTON, Sept. 26 (UPI) — The American Petroleum Institute said proper classification of crude oil is essential when considering policies for safer rail transit. In May, API said a study published by the North Dakota Petroleum Council eliminates some of the speculation surrounding Bakken crude . NDPC said Bakken crude oil "poses no greater risks than other flammable liquids" authorized for rail transport, though concerns have been raised by federal regulators "Proper testing, classification and handling are important when shipping any material subject to PHMSA regulations, and crude oil is no exception," API President Jack Gerard said in a statement Thursday. API published its own set of recommendations for testing and classification of crude oil for rail shipments, which includes a unique crude oil sampling and testing program. U.S. regulators […]

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AP Photo/Matthew Brown US Video Buy AP Photo Reprints Interactives Producers Tap Old Wells in Search of Oil Interactives/Galleries Washington Commuter Train Crash BILLINGS, Mont. (AP) — The oil industry’s lead trade group released new standards on Thursday for testing and classifying crude shipped by rail after prior shipments were misclassified, including a train that derailed in Canada and killed 47 people. As with earlier orders from the federal government, the industry standards leave it to individual companies to decide how often to test crude in order to gauge its danger. The American Petroleum Institute said the standards were crafted in cooperation with regulators and the rail industry. Shipping oil by rail has become far more common as domestic drilling booms in North Dakota, Montana, Texas, Colorado and other states. In July 2013, a crude train from North Dakota derailed and exploded in Lac-Megantic, Quebec, killing 47. The shipment […]

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Crude Oil Rail Car | Click to Enlarge Executives at top oil and gas companies in the Bakken are fighting back against North Dakota regulators, opposing the treatment of Bakken crude before it shipped via rail, according to the Wall Street Journal (WSJ). On Tuesday, the North Dakota Industrial Commission (NDIC) heard testimony from oil executives, who claim Bakken oil is sufficiently treated at the well site. The paper first reported the NDIC would be holding hearings in August concerning further treatment of Bakken crude, which has been linked to several explosions, resulting from train derailments. Just under 70% of Bakken crude is transported out of North Dakota by rail to coastal refining markets and hubs like Cushing, OK. Read more : NDIC Considers Bakken Crude Treatment Critics believe Bakken crude is dangerous, and needs to undergo stabilization. In similar plays like the Eagle Ford Shale in South Texas, […]

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WASHINGTON, Sept. 23 (UPI) — An environmental advocacy group said it wants President Barack Obama to use his authority to ban the type of rail cars tied to recent oil train derailments. Older rail cars designated DOT-111 carrying crude oil have been involved in a series of disastrous derailments, including the deadly incident in Lac-Megantic, Quebec in 2013. In mid-September, Earthjustice, ForestEthics and the Sierra Club filed a lawsuit against the Department of Transportation for not responding to a petition filed in July calling for a ban on shipping Bakken crude from North Dakota using DOT-111 cars. ForestEthics campaigner Matt Krogh said a recent report from the U.S. Governmental Accountability Office emphasized some of the risks associated with shipping oil by rail. "ForestEthics is asking the president to take the GAO report to heart, ban dangerous DOT-111 tanker cars, slow these trains, and protect the American public from the […]

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Railroad tank cars are filled with oil at the Musket Corp. Windsor Crude Terminal in Windsor, Colo. Bloomberg In May 2008, a locomotive with a grizzly bear painted on its side pulled into a railroad siding next to an abandoned grain elevator in the ghost town of Dore, N.D. The engine, property of the Yellowstone Valley Railroad, hitched up a couple of tank cars of crude from nearby oil wells and set off on a thousand-mile journey to Oklahoma. Dore would never be the same—and neither would the U.S. energy industry. Until then, most oil pumped in North America moved around the continent in pipelines. Suddenly, and just as the oil industry began a period of unprecedented growth, there was an alternative: "crude by rail." Today, 1.6 million barrels of oil a day are riding the rails, close to 20% of the total pumped in the U.S., according to […]

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