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Low natgas prices, high utility stockpiles weigh on US railroad coal volumes: executives

With myriad headwinds driving down coal shipments this year, officials with Class 1 US railroads painted a dim picture of their coal business Wednesday while speaking at the Cowen and Company 8th Annual Global Transportation Conference in Boston. In presentations broadcast online, officials with CSX, Northern Southern, Union Pacific, Kansas City Southern and Genesee & Wyoming sited low natural gas prices, mild summer weather and high utility stockpiles as the primary causes for a drop in demand. Fredrik Eliasson, CSX’s chief sales and marketing officer, said the railroad will lose about $400 million in coal business this year compared with 2014 and by the end of this year about $1.3 billion of coal revenue will have "disappeared" over the last four years. "I think it’s more and more realistic to think that where we are from a coal perspective, we’re not going to go back to kind of the […]

Posted On : Published By : Tom Whipple
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North Dakota gets energy transit grant

North Dakota gets federal grant to improve safer transport of energy products like crude oil. Photo by Steven Frame/Shutterstock WASHINGTON, Sept. 1 (UPI) — A grant from a federal safety regulator will help North Dakota invest in the infrastructure needed to transport oil safely and efficiently, a senator said. U.S. Sen. John Hoeven , R-N.D., said the federal Pipeline and Hazardous Materials Safety Administration granted the state about $200,000 to improve its ability to respond to incidents involving the transportation of hazardous materials like crude oil . "It’s important for us to invest in the right kind of infrastructure to move energy [resources] as safely and efficiently as possible, now and into the future," Hoeven said in a statement. "This grant will help us do just that." Hoeven, who serves on an energy committee in the U.S. Senate, said he’s been pushing an agenda that includes improvements in rail […]

Posted On : Published By : Tom Whipple
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Big Rail’s little cousins find boon in U.S. oil-by-rail bust

Unused oil tank cars are pictured on Western New York & Pennsylvania Railroad tracks outside Hinsdale, New York August 24, 2015. Amid the rolling mountains surrounding this quiet town in southwest New York state, tucked away on miles-long stretches of underused rail tracks, hundreds of idle oil tank cars attest to the extent of fallout from oil’s rout. The oil tank cars – a year ago sought-after to haul crude from North Dakota to New Jersey – now stand idle as a result of two converging trends: the reversal in U.S. shale oil production and the completion of new pipelines. They show how the pain from the slump in the oil-by-rail industry has spread far and wide. Big rail lines, such as Berkshire Hathaway-owned BNSF Railways or Union Pacific are losing what used to be their fastest-growing source of new traffic; refiners such as PBF Energy are left with […]

Posted On : Published By : Tom Whipple
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Pennsylvania’s governor issues crude-by-rail study he commissioned

Pennsylvania Gov. Tom Wolf (D) issued a study he commissioned in late April of issues stemming from the growing number of crude oil shipments by rail across the state. The report by Allan M. Zarembski, who directs the Railroad Engineering Program at the University of Delaware’s Civil and Environmental Engineering Department, made 27 recommendations including calls for more frequent track inspections and adoption of several voluntary safety measures. “Every week, roughly 60-70 trains carrying crude oil travel through Pennsylvania destined for Philadelphia or another East Coast refinery, and I have expressed grave concern regarding the transportation of this oil and have taken several steps to prevent potential oil train derailments,” Wolf said as he released the report on Aug. 17. “Protecting Pennsylvanians is my top priority and Dr. Zarembski’s report is important in helping my administration take the necessary steps,” he said. “I will also continue to work with […]

Posted On : Published By : Tom Whipple
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Rail fading from North Dakota oil transit

State data from North Dakota show rail transport of crude oil falling back after peaking in December 2014. Graph courtesy of the North Dakota Pipeline Authority BISMARCK, N.D., Aug. 18 (UPI) — New pipelines operating in North Dakota have pushed the volume of crude oil by rail lower during the first half of the year, a state official said. Rail broke away from pipelines as the main source of crude oil delivery in 2012. The boom in shale oil production from the so-called Williston basin, hosting the Bakken and Three Forks shale formations, had outpaced pipeline capacity, leaving companies with rail as the primary alternative transit option. After peaking in December 2014, when the state set its crude oil production record at 1.22 million barrels per day, transport by rail has been in a general decline and is now at parity with pipeline transport. Justin Kringstad, director of the […]

Posted On : Published By : Tom Whipple
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TransCanada: Study shows pipeline safer than rail

TransCanada points to study that says using pipelines to transport oil and natural gas is safer than rail. Photo courtesy of TransCanada. CALGARY, Alberta, Aug. 14 (UPI) — Pipeline company TransCanada pointed to a study that suggests the increase in the rail transport of crude oil is a risky option for the industry. TransCanada spokesperson Mark Cooper in an emailed statement said a report from The Fraser Institute shows transport of crude oil and natural gas in Canada by pipelines is 4.5 times safer than rail. For its long-delayed Keystone XL pipeline through the United States, the company said pipelines are also substantially less carbon intensive than other modes of transit. "Federally regulated pipelines in Canada currently move just under 15 times more hydrocarbons than do the railroads," Kenneth P. Green, the study’s lead author, said in a statement. "But with increased production and continued opposition to new pipeline […]

Posted On : Published By : Tom Whipple
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U.S. sets new final rule on oil, ethanol trains

An aerial view of burnt train cars after a train derailment and explosion in Lac-Megantic, Quebec July 8, 2013, in this picture provided by the Transportation Safety Board of Canada. The Obama administration on Wednesday released a new regulation intended to prevent explosive rail disasters such as the 2013 oil train derailment that killed 47 people and destroyed part of Lac-Megantic, Quebec. The new rule by the Federal Railroad Administration (FRA) requires two qualified railroad employees to ensure that handbrakes and other safety equipment have been properly set on trains left unattended while carrying dangerous materials such as crude oil or ethanol. A series of oil train accidents in recent years led the United States and Canada in May to announce sweeping new safety regulations that require more secure tank cars and advanced braking technology to prevent moving trains from derailing and spilling their contents. The new rule is […]

Posted On : Published By : Tom Whipple
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Rail Tank Car Orders Fall Sharply

Orders for railroad tank cars fell sharply in second quarter, reflecting lower shipments of crude oil amid falling prices. Orders for 3,155 tank cars were placed in the quarter, down 29% from first quarter and off 70% from the second quarter of 2014, the Railway Supply Institute reported. The order backlog dropped 11% from the first quarter to 46,375 tank cars. The decline comes amid a broad decline in energy shipments at railroads. Carload volume for oil and petroleum products for the week ended July 18 was down 20% from last year and were off 2.7% in the first 28 weeks of 2015 from the same period in 2014, according to the Association of American Railroads. Meanwhile, orders for boxcars surged in the second quarter as shippers—led by the paper industry—complained of car shortages caused by railroads culling older boxcars from their fleets. Boxcar orders were 2,940 against none […]

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Officials: Oil train didn’t speed before Montana derailment

AP Photo/Richard Peterson Train Derailment BILLINGS, Mont. (AP) — A train that derailed and spilled 35,000 gallons of oil in northeastern Montana was traveling within authorized speed limits, federal officials said Monday as they continued to probe the accident’s cause. The Burlington Northern Santa Fe Railway train loaded with crude from North Dakota was traveling 44 miles per hour before Thursday’s wreck, U.S. Federal Railroad Administration spokesman Matthew Lehner said. Officials have said the maximum authorized speed in the area is 45 mph. Twenty-two cars on the BNSF train derailed near the small town of Culbertson. Lehner said the tank cars were a model known as the "1232,"which is built under a 2011 industry standard intended to be more crash-resistant than earlier designs. But several recent oil train crashes, including some that caught fire, also involved 1232s and federal officials are seeking to phase out the cars. The oil […]

Posted On : Published By : Tom Whipple
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A timeline recent oil train crashes in the US and Canada

The derailment of an oil train in rural northeastern Montana follows a string of accidents as shipments of crude by rail have increased dramatically in recent years, driven by a surge in domestic production: – July 5, 2013: A runaway Montreal, Maine & Atlantic Railway train that had been left unattended derailed, spilling oil and catching fire inside the town of Lac-Megantic in Quebec. Forty-seven people were killed and 30 buildings burned in the town’s center. About 1.6 million gallons of oil was spilled. The oil was being transported from the Bakken region of North Dakota, the heart of an oil fracking boom, to a refinery in Canada. – Nov. 8, 2013: An oil train from North Dakota derailed and exploded near Aliceville, Alabama. There were no deaths, but an estimated 749,000 gallons of oil spilled from 26 tanker cars. – Dec. 30, 2013: A fire engulfed tank cars […]

Posted On : Published By : Tom Whipple