North Dakota Bakken Crude Oil

First CP Crude Oil train for the new KCS served terminal at Port Arthur, TX ran yesterday, the train CP 612 ran from Harvey, ND to KCS interchange at Kansas City, MO. The train was made up from blocks loaded in New Town, ND. I don't know KCS' symbol for this train. Traffic is starting to run pretty heavy through the Twin Cities, it is estimated at 10 BNSF and 2.5 CP trains per day(some CP traffic for Albany, NY is routed via Thunder Bay, ON due to crew shortages at Elkhart, IN and congestion in Chicago).

JayBee wrote:Traffic is starting to run pretty heavy through the Twin Cities, it is estimated at 10 BNSF and 2.5 CP trains per day(some CP traffic for Albany, NY is routed via Thunder Bay, ON due to crew shortages at Elkhart, IN and congestion in Chicago).

Is that just crude oil trains or total freight traffic?

Just Crude, I have been informed that the 10 BNSF trains was just due to MOW work, and that 8 will be more normal. CP very badly needs CTC west of Glenwood, MN as the workload on the Dispatchers is getting very heavy issuing Track Warrants to all the traffic in North Dakota. This fall when the grain starts running, lookout.

Sorry for asking the obvious but I'm assuming that 8 extra trains per day represents a significant percentage of traffic running through MSP on the BNSF?

Yes, the increase has been enough that the Big Boys (Matt Rose and Co.) where just up for an inspection trip on Friday to see what money needs to be spent on the St. Croix Subdivision. The St. Croix Sub. runs from downtown St. Paul, MN to N. LaCrosse, WI down the East Bank of the Mississippi River. The first 16 miles are shared 2MT with CTC used jointly with CP (50+ trains per day). At St. Croix Interlocking CP swings away to the south crossing the Mississippi to follow the West Bank, while BNSF stays on the East Bank. BNSF has 1 more mile of 2MT CTC and then begins Doubletrack with Track Warrants intermixed with singletrack CTC islands at each of four major river crossings to N. LaCrosse. Each of these crossings will be expensive to double as they are long (right where the rivers flow into the Mississippi) and the Bedrock is deep. CP (ex-MILW) took the easier side. At LaCrosse, WI the BNSF and CP have an at grade crossing (Grand Crossing) controlled by CP, that is just east (south) of their respective yards and inside city limits. East(south) of LaCrosse BNSF is all singletrack CTC to either Chicago or Galesburg, IL.

Is the East Bank alignment the ex-CNW (or perhaps ex-CB&Q)?

In re: TWC being used in ND I find it humorous to imagine supervisors at CP perhaps thinking wistfully of just having old-fashioned ABS in place.

I'm sure that CP will only put up with this situation for so long. BNSF is even less likely to tolerate continuing track delays. I'm assuming the crossings enroute to N. LaCrosse have always been single track. Fascinating to think of rails in these parts being operated at or beyond capacity even with some modern signalling overlays already in place. The fate of the MILW, as superflous, comes to mind.

[EDIT:clarity]

Here's a link to an article covering information about Enbridge's Gulf Coast pipeline plans I have now seen repeated across several news platforms. The article probably provides more comprehensive and detailed information about the full picture of Enbridge's plans than I have seen elsewhere.

Although it is written from the perspective of impact to the Canadian oil market it also covers the significance to the Bakken formation as well.

Two projects announced on March 26 by Calgary-based Enbridge and U.S. partner Enterprise Products Partners LP (EPD) (EPD) would expand crude capacity to the Gulf Coast by 500,000 barrels a day by 2014, a big step toward narrowing the price gap, said Roger McKnight, senior petroleum adviser at En-Pro International Inc., an Oshawa, Ontario-based energy adviser.

Keep in mind that even an additional 500,000 barrels per day of pipeline capacity will only cover present rates of production from the Bakken. This additional capacity makes no provision for production from the Eagle Ford shale or other shale oil formations in the lower Mid-West.

gokeefe wrote:Is the East Bank alignment the ex-CNW (or perhaps ex-CB&Q)?

In re: TWC being used in ND I find it humorous to imagine supervisors at CP perhaps thinking wistfully of just having old-fashioned ABS in place.

I'm sure that CP will only put up with this situation for so long. BNSF is even less likely to tolerate continuing track delays. I'm assuming the crossings enroute to N. LaCrosse have always been single track. Fascinating to think of rails in these parts being operated at or beyond capacity even with some modern signalling overlays already in place. The fate of the MILW, as superflous, comes to mind.

[EDIT:clarity]

East Bank = ex-CB&Q, West Bank = ex-CM&StP. Of course, both mainlines are on the east side of the river from St. Paul to Hastings. The ex-C&NW, nee-CMStP&O mainline broadly follows I-94, heading straight east from St. Paul and not following the river.

I'd be interested in going to North Dakota and seeing the trackwork necessary from Newtown to Drake, just to see what restrictions CP is laboring under when compared to BNSF's track net.

Apparently, some of that stuff has even found its way onto the former PRR Wilkes-Barre Branch, now under joint CP/NS manangement, with Westville, NJ as the ultimate destination. The trains are symbolled 614-615 Will wonders never cease?


http://groups.yahoo.com/group/cprsunburysub/

A search on Google turned up some good results discussing this move on Trainorders.com.

The Sunoco refinery in the area shutdown, reportedly at least in part due to the fact that they were having to buy more expensive foreign crude. I have to wonder if this decision could be reversed if the owners decide that the supply from the shale oil deposits, whether from ND or elsewhere is going to be consistent.

Delta Airlines is looking at one of the refineries in the Philadelphia/Camden area, and reportedly the Carlyle Group is looking at another. The availability of Bakken crude may be changing the economics of operating these refineries.

CP has invested $90 million in upgrading the New Town branch to handle the crude oil shipment so far with more to come. Also the shortline DMV&W hands off a loaded ethanol train at Max, ND several times per week. CP came very close to selling this line a few years ago. The $90 million bought 27 miles of welded rail, and additional yard tracks at New Town and Max. The only place trains can meet on the branch is at Max about the mid-point of the 110 mile long branch.

Fred Frailey has an article about the railroads in the Bakken oil fields in this months Trains Magazine.

Here is New York Times coverage of the possible acquisition of a refinery by Delta Airlines"

http://www.nytimes.com/2012/04/05/busin ... inery.html

Brief passage:

• Running an airline is a tough business. But running an oil refinery can be even more punishing.
  
  So refining experts were puzzled this week when Delta Air Lines emerged as a possible buyer of a refinery near Philadelphia that ConocoPhillips is trying to sell.
  
  “It’s a little like a rabbi buying a church,” said Tom Kloza, the publisher and chief oil analyst at the Oil Price Information Service, which first reported Delta’s possible interest on Monday. “It’s so counterintuitive.”
  
  Delta declined to comment. A spokesman for Conoco also declined to comment on a potential bid for its Trainer, Pa., refinery, but said the company was “continuing efforts to find a buyer.” The airline’s bid was confirmed by a person familiar with the situation who declined to be identified because the deal was not final.
  
  Rising fuel costs have forced a painful restructuring for airlines in recent years, helping to push many of them into bankruptcy and spurring consolidations across the sector. Jet fuel now accounts for about a third of an airline’s operating costs, a share that has been steadily rising along with the price of crude oil.

I'd expect other airlines could follow suit, but not certain about other Class I roads.

Should they, anyone?

I have seen indications in other media that Delta's creditworthiness may be part of the issue here. They may be having trouble entering into routine fuel contracts at normal prices.

If things really are that bad for them they may not feel that they have a choice.

Carlyle and Sunoco appear to be negotiating a deal for Carlyle group to purchase a 50% stake in Sunoco's Philadelphia Refinery. The facility is expected to become profitable again by sourcing about half of its crude requirements with oil from the Bakken formation.

(Reuters) - Refiner Sunoco Inc and private equity firm Carlyle Group are planning to revive the fortunes of the 335,000 barrel per day refinery in Philadelphia by running about half of it on crude from North Dakota and Canada, a source familiar with the plan said on Monday.
...
"It is the closest to Brent," said the source, about the similar quality to the North Sea benchmark which has been run at the refinery for many years. Bakken crude trades at about a $20 discount to Brent, trade sources said.

Bloomberg News is also covering this story.

Carlyle Group (CG)’s talks to buy a majority stake in Sunoco Inc. (SUN)’s Philadelphia refinery show private equity is betting the business abandoned by public oil companies may be poised for a long-term rebound.
...
Although Sunoco has lost money in refining in 10 of the last 11 quarters, the fortunes of the Philadelphia plant could improve if the company is able to buy cheaper oil produced in Canada and North Dakota, John Auers, senior vice president of Turner Mason & Co., a Dallas-based energy consulting firm.

To my great surprise reading through the Maine Northern Railway thread in the BAR/MMA forum I discovered that shipments of crude oil from the Bakken formation are now coming through from the CP in Montreal over the MMA in Maine (former "International Railway of Maine/Canadian American (CDAC)).

The shipments are being sent to the Irving refinery in St. John, NB.