North America - Oil Transport By Rail

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North America - Oil Transport By Rail

Postby Gilbert B Norman » Sun Jan 12, 2014 3:23 pm

A broad topic I know, but I hold that this article, which should be available to all, appearing in Last week's Thursday Wall Street Journal has much merit within and can be a catalyst for discussion regarding handling of oil throughout North America, i.e. Can, Am, & Mex roads:

http://online.wsj.com/news/articles/SB1 ... 1635384130

At first I was guilty of thinking Why did The Journal assign some 'cub' to this story, showing 'cubbybear' with this opening paragraph?

    LAC-MÉGANTIC, Quebec—Trains have resumed rolling through this small community again, past 47 Christmas trees in front of St. Agnes Church that honor the townspeople killed last July when a runaway oil train left their downtown in an inferno. The 1 a.m. crash of a driverless train that had broken free from its moorings and barreled downhill before derailing sent waves of flame coursing through town.

But after further review, I realized the reporter, Ms. Morris, developed 'hard reporting' within, and established revelations within the article that even those of us who follow industry affairs as a business, as distict from a hobbyist (railfan), can learn from such.

TIME OUT to develop my thoughts
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Re: North America - Oil Transport By Rail

Postby MEC407 » Thu Feb 06, 2014 10:07 am

From the Brainerd Dispatch:

Brainerd Dispatch wrote:Train sprays crude oil for nearly 70 miles

RED WING - A southbound Canadian Pacific train leaked a trail of about 12,000 gallons of crude oil Monday morning after passing through Red Wing, according to the Minnesota Pollution Control Agency.

MPCA emergency responders worked with railroad personnel throughout the day Tuesday to gauge the extent of the spill and check for environmental damage, MPCA spokeswoman Cathy Rofshus said.


Read the rest of the article at: http://brainerddispatch.com/news/2014-0 ... ZI.twitter
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Postby Gilbert B Norman » Thu Feb 13, 2014 3:21 pm

Here is report and discussion of the Vandergrift oil train incident on NS that occurred today.

viewtopic.php?f=56&t=154935&p=1250124#p1250124
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Re: North America - Oil Transport By Rail

Postby Ken W2KB » Tue Feb 25, 2014 11:32 am

More enviro opposition to petroleum and coal rail transport:

Fair use quote from an energy industry trade mag:

"Environmentalists issued a report estimating that fossil fuels could bring 82 trains a day through Spokane and Sandpoint a decade from now. BNSF Railway officials said those estimates are unsubstantiated.

At the same time, U.S. Sen. Heidi Heitkamp, D-N.D., last week released government figures showing that Federal Railroad Administration inspectors found 13,141 rail track defects in her state since 2006. BNSF Railway was issued 721 written violation notices based on those defects."

Full article at: http://www.energycentral.com/generationstorage/fossilandbiomass/news/en/31631334/Oil-coal-trains-concerns-likely-to-increase?utm_source=2014_02_24&utm_medium=eNL&utm_content=304304&utm_campaign=GENERATION
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Re: North America - Oil Transport By Rail

Postby ljpierce1965 » Tue Feb 25, 2014 3:09 pm

Article about BNSF purchasing 5000 newer, and presumably improved, tank cars.

http://www.reuters.com/article/2014/02/ ... BE20140220

Being that I am slated to start working for BNSF on March 17th, 2014 in Minot, this subject is definitely of interest to me.
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Re: North America - Oil Transport By Rail

Postby Gilbert B Norman » Wed May 21, 2014 9:13 am

May 14 Wall Street Journal carried a column obviously written by one with environmentalist credentials but who advocates the Keystone XL

http://online.wsj.com/news/articles/SB1 ... 0702494254

Brief passage:

    The Keystone XL Pipeline got another nail in its coffin Monday, in the form of a Senate energy vote that excluded the pipeline issue. But Keystone was already near death thanks to the Obama's administration's recent decision to ignore the evidence of a definitive government study—and instead keep listening to environmentalists' dubious claims. The upshot will be more political fires in Washington caused by train derailments in the absence of a pipeline to transport oil more safely.

    After the derailment in downtown Lynchburg, Va., on April 30, approximately 30,000 gallons of Bakken crude oil burned or spilled into the James River. On May 9, a derailment north of Denver spilled another 6,500 gallons of oil, which was contained in a ditch before reaching the South Platte River. Fortunately, unlike in the 2013 derailment in Quebec where a 1.3 million-gallon spill killed 47 people and incinerated 30 buildings, no one was injured in Lynchburg or Colorado
Some of the Letters appearing May 20 certainly suggest collusion between railroad interests and the Administration:

http://online.wsj.com/news/articles/SB1 ... 0890632964

Brief passage:

    Mr. Anderson addresses the risk (i.e., environmental hazard) side of the pipeline versus rail-transport equation, but the economic benefits side of that equation overwhelmingly favors pipeline construction as well. One of the few beneficiaries of the Keystone XL pipeline delay is the railroad industry, including BNSF Railway Co., owned by White House supporter Warren Buffett's Berkshire Hathaway
As noted at other Crude related topics, Lynchburg, a comparatively minor, yet evidently visible, incident, is proving to be the industry's PR nightmare - even though Keystone XL received a setback in the US Senate
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Re: North America - Oil Transport By Rail

Postby JayBee » Thu May 22, 2014 8:50 am

It should be noted that the TV commercial currently running quotes Warren Buffet as supporting the construction of the Keystone XL pipeline. The ad is sponsored by the American Petroleum Institute.
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We Report, You Decide

Postby Gilbert B Norman » Fri May 23, 2014 12:03 pm

Today's Wall Street Journal carries a report conspicuously located B Section Page 1 'above the fold':

http://online.wsj.com/news/articles/SB1 ... 1760037536

Brief passage:

    Starting next month, the federal government will require railroads to tell states how many trains of Bakken oil from North Dakota are headed their way and which routes such pipelines-on-wheels will take. The rules, which apply to shipments of at least 1 million gallons, or roughly 23,810 barrels, say the information should be shared with government officials. Most oil trains include 100 or more tank cars, each of which holds about 30,000 gallons of crude.

    The emergency order doesn't require railroads to share details about the volatility or combustibility of the crude. Nor does the order require information on what kind of railcars are transporting the oil, which has been another focus of accident investigators.

    It doesn't apply to shipments of similarly volatile crude from other shale formations. Oregon's two senators, both Democrats, urged that the rule include disclosures on any train carrying crude, not only oil from North Dakota.

    Refiners said the new rules could end up increasing risks. 'Does this order provide a would-be terrorist with specific route information?' asked Richard Moskowitz, general counsel for the American Fuel & Petrochemical Manufacturers lobbying group.

    Some people in the railroad industry agree. 'If you start setting up a system where public officials are notified of hazardous-material movements like this, you will have a lot of public conversation about things that, in our post 9/11 world, we don't want to have public', said a board member of a major railroad..

    Railroads also want to avoid protests by student activists and environmentalists such as last August's sit-in on tracks in Auburn, Me., seven weeks after the deadly Lac-Mégantic, Quebec, oil-train explosion.
While I like to think that the Journal's current railroad reporter, Betsy Morris, is 'sticking to the facts' here, I am concerned about the undertone that the industry is trying to hide something. If they are trying, it is simply nothing more than commercial proprietary information. Railroad employees have long been barred from making public disclosure of a train's lading and the routings of any cars. When it comes to handling crude, I don't think it is anybody's business outside of 'need to know' if, say for an example, a train is diverted to another terminal possibly for reasons that the shipper expects a more favorable price here as opposed to there. That once again, proprietary.

But all told, I present this material with the caveat 'we report, you decide'.
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Re: North America - Oil Transport By Rail

Postby Gilbert B Norman » Thu Oct 30, 2014 8:16 am

Even though railroad is not mentioned in either, two articles have recently appeared in The Wall Street Journal that should be of interest to discussion at this topic:

October 28

Brief passage:

Gasoline prices have dropped below $3 a gallon at most U.S. gas stations, delivering a welcome lift to American consumers and retailers heading into the holidays. But the related oil-price drop has a thorny underside: It is threatening to slow the nation’s energy boom and hit the broader economy.

The U.S. economy is still set to gain more than it loses from cheaper oil, at least at current prices. Lower prices at the pump give drivers more money to spend on discretionary items like restaurant meals and vacations, and they reduce costs for many businesses.

But the latest drop is spurring debate among economists over how much falling prices will squeeze domestic producers, a reflection of the far-reaching implications from the nation’s energy resurgence.

High oil prices in recent years drove the energy boom by making costly drilling techniques like hydraulic fracturing economically feasible. Now, oil-rich states could see job growth slow. Producers would see profits tumble. And investors are already retrenching from one of the hottest sectors of the expansion.

“It creates winners and losers,” said David Rosenberg, chief economist at money-management firm Gluskin Sheff & Associates. “But with or without a shale-gas revolution, the U.S. economy comes out a winner.”


This article appears to be mostly directed at the favorable "consumer pocketbook issues". Passenger rail interests on one hand will cheer that the Empire
Builder will again run on time, but on the other there will be the "hey, gas is only 3 bucks, let's just drive". However, the final quoted sentence leads into the following article.

October 30

Brief passage:

Oil prices would need to fall at least another $20 a barrel to choke off the U.S. energy boom, industry experts say, though some smaller American producers would face serious problems from a more modest decline.

Small and midsize companies—not global giants—are behind the surge in U.S. oil output, which hit 8.97 million barrels a day earlier this month, according to federal statistics. Some of these drillers have taken on a lot of debt, which was easier to justify when oil was going for as much as $107 a barrel just four months ago.

U.S. crude closed Wednesday at $82.20 a barrel, and far less in some parts of the country where few pipelines are available to move it to refineries. Lower oil prices mean drillers will have less cash to cover their borrowings, especially if crude prices tumble more.

So far, American companies haven’t reacted to the recent oil-price drop: The number of drilling rigs searching for onshore oil in the U.S. has risen slightly since oil prices peaked June 20.

The Organization of the Petroleum Exporting Countries seems to be betting that will change soon. Abdalla Salem el-Badri, OPEC’s secretary general, predicted Wednesday that if current prices hold, half of the U.S. oil that is fracked from shale formations will be uneconomic, leading companies to stop producing it.

That view is at odds with most U.S. forecasters, who say output can remain steady at current prices because companies have cut their costs by finding ways to produce oil more efficiently. For example, the amount of oil coming from each new well in South Texas has nearly doubled since 2012, federal data show.


As I've noted in past discussion, I first learned of shale oil taking Geology 101 during 1962, but of course learned, back when crude was $3bbl, it was simply too costly to extract. Even though the article reports that there is "still room to go" in a crude price drop before North American sources become uneconomical, there is also inference that some Sheik of Araby could drop the price so low as to eliminate North America production. I respect the thoughts that Messrs. O'Keefe and Stolberg have shared that they believe such action is unlikely, that one or the other of the above, even if in defiance of OPEC, could do such.

Also ominous is the article notes that many a small independent driller is "high" on "Opium" - OPM - other people's money. Need we have anything resembling a rerun of Sep 15 '08?

Otherwise "We report, you decide".
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Keystone - Again

Postby Gilbert B Norman » Thu Nov 13, 2014 9:09 am

It just won't go away.

Today's Wall Street Journal reports that there will be initiatives by the "lame duck" Congress to pass legislation allowing the Keystone XL pipeline project to proceed:

http://online.wsj.com/articles/rival-lo ... 1415831265

Brief passage:

“I’m going to do everything in my power here and on the campaign trail, where I am still in a runoff, as you know, to get this project moving forward,” Ms. Landrieu said on the Senate floor. For energy-rich Louisiana, the pipeline has been a top issue in the race.

Ms. Landrieu expressed confidence that there are 60 “yes” votes needed to pass the legislation, though independent political analysts have said the number likely falls just short of that because of a lack of support among Democratic senators.

Senate Democratic leaders “have not been strong Keystone supporters, but the fact of the matter is that we’ve got 15 members of our caucus who are,” Ms. Landrieu said in a press conference later Wednesday.

Sen. Sheldon Whitehouse of Rhode Island, a Democrat who opposes Keystone XL, signaled earlier Wednesday that he wouldn’t object to bringing the bill up for a vote. Many Democrats oppose the pipeline because they say it promotes the use of fossil fuels and contributes to climate change.


Coincidentally, New York Times columnist Gail Collins weighs in on the matter today as well:

http://www.nytimes.com/2014/11/13/opini ... nasty.html

Brief passage:

“Let’s begin with trusting each other, moving forward and passing the Keystone pipeline,” said Democrat Mary Landrieu.

Yes! Keystone XL. Landrieu is facing a runoff election Dec. 6, and she wants to send a message to her state that she knows how to help Big Oil.

“Elections have consequences,” she said, calling for a quick vote on a bill authorizing construction of the pipeline. “And this one does. ... And one of the consequences is that a clear path for Keystone has been opened up.”

Wow. Who knew that was the message? Many environmentalists are violently against the Keystone project because it would carry oil to the Gulf refineries from the tar sands of Canada, which is particularly bad when it comes to carbon emissions. The pipeline may wind up getting built anyway, but nothing is going to happen until a court case over its route is resolved in Nebraska. A vote right now by Congress would be meaningless, and it’s a terrible moment to take a symbolic stand, since President Obama was just in China, announcing an agreement on fighting global warming.

There’s that. But then, on the other hand, there’s an election in Louisiana. While Landrieu was demanding a vote on her pipeline bill in the Senate, the House was gearing up to pass exactly the same bill, under the sponsorship of Representative Bill Cassidy, who happens to be her opponent in the Senate runoff next month.


It appears that in an uphill quest to be re-elected, Sen. Landrieu (D-LA) is prepared to sell out her Democratic caucus as well as railroad industry interests (disclaimer: author has longtime close friends who support Sen. Landrieu for her positions on several social issues). Adding insult to injury, if the legislation is passed, even though opposed to the pipeline, President Obama will sign it.

XL will become a "okay guys and gals, you see I'm ready to work with you, now how about you all working with me" issue. Also, even though a runoff re-election of Sen. Landrieu will not affect Republican control of the Senate, she certainly represents an important ally for Hillary in what could be a "swing" state.

So aside from a short term "win' for the railroads (let alone all these "good paying jobs") in handling construction material, who will be the losers? I think the "biggest loser" will be the Grand Trunk, or otherwise Canadian National/USA. Completion of the pipeline will inroad to the single carrier service that can be offered from the Western Canadian fields on the CN, thence interchanged at Duluth to the DW&P (the "Peg"), thence to the WC at Mpls, and finally to the IC at Chicago and a "roll on down to the sea". The KCS will also be hurt, but not to same extent as their "over hill over dale" route is presently not as favorable and they cannot offer single carrier service and will rely upon what the CP can give them through North Kansas City. The impact will not be as great to the SOO and BNSF serving the Bakken Fields.

All told, a "lose-lose" for the industry.
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Re: North America - Oil Transport By Rail

Postby Gilbert B Norman » Fri Nov 14, 2014 12:31 pm

Today, The Wall Street Journal has editorialized regarding Sen. Landrieu and Keystone largely echoing my thoughts set forth yesterday:

http://online.wsj.com/articles/mary-lan ... 1415923975

Brief passage

Elections have consequences, as President Obama said in his glory days, and barely a week later the losing Senate Democrats have already broken their line against the Keystone XL pipeline. Call it the Save Mary Landrieu Act of 2014.

And continuing, with what I can only consider as an "anti-rail tirade"

If Keystone isn’t built, oil producers will employ other vehicles to transport Canadian crude. Cenovus Energy plans to export 375,000 barrels a day to Canada’s east and west coasts via other pipelines. Canadian Pacific Railway estimates that it will carry 200,000 carloads of crude next year, more than double last year’s load. Valero Energy is expanding rail terminals in California, Louisiana and Quebec to handle more oil shipments.

One irony is that rail poses a greater environmental risk and so-called carbon footprint than the 1,200-mile underground pipeline. According to a State Department report this year, distributing the oil via train directly to the Gulf of Mexico would increase greenhouse gas emissions by 41.8%.

Those of us here who support railroad interests, and those of us here who have "put their money where their mouths are" from being stakeholders in such, had best accept that Keystone XL is inevitable. What remains unknown is to what such will adversely affect the railroad industry. What of course cannot help but be ominous, is Saudis drastic cuts in the price for a barrel, and is simply what I speculated earlier in this topic could happen. Of course such has occurred Keystone notwithstanding.
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Re: North America - Oil Transport By Rail

Postby Gilbert B Norman » Wed Nov 19, 2014 10:40 am

As likely, readers of this material are aware, the Keystone XL lost by one vote in the US Senate. Sen. Landrieu (D-LA) had best be looking through her Rolodex (whoops, that's Contacts on an Android screen) to see who on "K" Street will take her on come January. Actually, I have learned from friends who are within the Adoption community that Sen. Landrieu is active within this area, and possibly may have more time and desire to devote to these efforts.

But one way or the other it is a sure bet that the Republican controlled Senate, along with the Republican controlled House, will pass legislation (and of course the Senate to ratify the necessary treaty with Canada) enabling the project to move forth. The pipeline will not be completed overnight, so I guess it is up to the railroad industry to "be on their best behavior" and handle crude without major incident and develop strategies to show shippers that there is much greater flexibility to divert rail shipments to different markets than can a pipeline offer.

All told, while the KXL will "hurt" - especially the roads handling N-S shipments of crude, I doubt such will put the railroads out of the crude business or otherwise return the industry to its "Dark Ages", which I define as the years I was employed within such - 1970-81.
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Re: North America - Oil Transport By Rail

Postby mmi16 » Mon Nov 24, 2014 12:10 am

Gilbert B Norman wrote:As likely, readers of this material are aware, the Keystone XL lost by one vote in the US Senate. Sen. Landrieu (D-LA) had best be looking through her Rolodex (whoops, that's Contacts on an Android screen) to see who on "K" Street will take her on come January. Actually, I have learned from friends who are within the Adoption community that Sen. Landrieu is active within this area, and possibly may have more time and desire to devote to these efforts.

But one way or the other it is a sure bet that the Republican controlled Senate, along with the Republican controlled House, will pass legislation (and of course the Senate to ratify the necessary treaty with Canada) enabling the project to move forth. The pipeline will not be completed overnight, so I guess it is up to the railroad industry to "be on their best behavior" and handle crude without major incident and develop strategies to show shippers that there is much greater flexibility to divert rail shipments to different markets than can a pipeline offer.

All told, while the KXL will "hurt" - especially the roads handling N-S shipments of crude, I doubt such will put the railroads out of the crude business or otherwise return the industry to its "Dark Ages", which I define as the years I was employed within such - 1970-81.


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Re: North America - Oil Transport By Rail

Postby Gilbert B Norman » Mon Nov 24, 2014 2:45 pm

I'd like to avoid saying that "pro-pipeline" Journal has an "agenda", but when material which to me appears "one-sided" appears at the website in a Blog, I really have to wonder:

http://blogs.wsj.com/experts/2014/11/24 ... transport/

Brief passage:

Rail has traditionally been a secondary crude-transportation mode because it costs two to three times as much as pipelines. In 2009, 10,000 carloads of crude oil was carried on Class I railroads. By 2013, this traffic had grown to 400,000 carloads—a 40-fold increase. This explosive growth has resulted in rail congestion and service delays, which often impact transportation of grain and other commodities. It has also led to an increase in rail accidents. The incident at Lac-Mégantic, Quebec, which left 47 dead, is the most notable such accident. There have also been tank car failures, spills and derailments.

Even through rail is not the ideal transportation mode, it will remain a reality. This is especially true for shipments to the East and West Coasts, since no pipeline projects are in the works. It is also true for bitumen, a very heavy, viscous grade of crude oil, which can be transported by rail without dilution. Railroads have invested billions of dollars to increase capacity and improve maintenance. But congestion remains, and accidents continue.

What is needed is an effective and swift rollout of improved standards for railcars, improved risk identification and mitigation processes, and better availability of information to support improved emergency response. Regulators are taking action. But with several of them involved, cooperation and swift action are needed to enable an appropriate response from railroad operators and tank car manufacturers.


http://blogs.wsj.com/experts/2014/11/24 ... oving-oil/

Brief passage:

Pipelines are undeniably the lowest risk and most efficient means of transport onshore for point to point movement. They require both regulation and ongoing inspection and maintenance and should be replaced based on predetermined age and risk factors.

Trains and trucks work when the distance is short and the volumes not so large. Trains can also provide a temporary longer distance, higher volume solution until the costs of a pipeline are justified. Facts are facts and crude oil in tankers weighs a lot; its contents are volatile under certain conditions; rails are thin, as are train car wheels, and possibly brittle, depending on age, construction, wear and tear, and weather. Tracks are constantly exposed to breakdown. Trucks are exposed to the same risks, including traffic and other highway conditions. Trucks are also higher risk being subject to human factors, more so than other transport infrastructure.


I think I best leave this report with the simple "We report, you decide".
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Re: North America - Oil Transport By Rail

Postby ExCon90 » Wed Nov 26, 2014 3:47 pm

As to mmi16's question: according to the Constitution, 60 votes are required to override a presidential veto, and under Senate rules 60 votes are required to shut off a filibuster. Any bill provoking strong feelings is likely to result in one or the other; for proclaiming National Motherhood and Apple Pie Week or some such, 51 votes would be sufficient.
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