Town escapes tragedy, but derailments won't curb soaring oil shipments

|By:, SA News Editor

The town of Casselton, N.D., narrowly escaped tragedy yesterday when a train carrying crude oil derailed and exploded, and its mayor says shipping oil by pipeline would be a safer option.

Residents said explosions continued for hours after the derailment, and BNSF Railway (BRK.A, BRK.B) said ~20 cars caught fire after its oil train left the tracks; the cars are being allowed to burn out.

The incident could draw more regulatory scrutiny to rail shipments of crude, but analysts say the soaring use of trains to move oil is a long-term trend that isn't likely to change soon.

"Rail will be the long-term transportation solution out of the Bakken to the U.S. east and west coasts due to the lack of pipeline infrastructure to those refining centers," Tudor Pickering says.