More U.S. oil is moving via truck, barge and train than any time since 1981

As new pipelines can't keep up with exploding U.S. oil production, oil deliveries jumped 38% on trucks, 53% on barges and 400% on trains from 2011 to 2012, according to a WSJ article; just five years ago, large U.S. railroads carried just 9,500 carloads of crude, a figure expected to reach nearly 400K in 2013.

The downside: More wear and tear on roads unsuited to heavy traffic and the potential for more damaging spills and accidents such as last month's train explosion in that killed nearly 50 people.

It's a precursor to the construction of more than $40B in oil pipelines now under way or planned for the next few years; NuStar's (NS) Curt Anastasio says "we are in effect re-plumbing the country."

Comments (3)
  • User 353732
    , contributor
    Comments (5168) | Send Message
    The E&P companies have discovered that rail is a logistical option that has merit even if there is adequate pipeline capacity.


    It is more expensive of course but rail companies do not require multi year( even multi decade) commitments for logistical capacity as pipelines do because of financing requirements. Rails are also much faster than pipelines in delivering the oil or NGLs and offer much more flexible access to shifting premium markets, The market premium is often equal to or greater than the cost premium of rail over pipeline.
    26 Aug 2013, 02:12 PM Reply Like
  • Darren McCammon
    , contributor
    Comments (4405) | Send Message
    ARII produces some of the bullets in the oil transportation war.
    26 Aug 2013, 04:02 PM Reply Like
  • Claude Badly
    , contributor
    Comments (3) | Send Message
    Midstream producers are excited about the fracking boom because its giving them the opportunity to put unused pipelines back into service. NuStar has more than 100000 bbl / day of idled pipelines.
    26 Aug 2013, 08:30 PM Reply Like
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