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  • North Dakota Bakken Crude Oil

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For topics on Class I and II passenger and freight operations more general in nature and not specifically related to a specific railroad with its own forum.

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 #1041675  by JayBee
 
gokeefe wrote: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.
I was wondering where Canadian produced Bakken Oil was going as there is no sign of it showing up on CP in the US.
 #1041728  by gokeefe
 
JayBee wrote:
gokeefe wrote: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.
I was wondering where Canadian produced Bakken Oil was going as there is no sign of it showing up on CP in the US.
There have also been indications that CP is sending it (via NS) to terminals at idled refineries in PA for storage and onward sale.
 #1041862  by Gilbert B Norman
 
gokeefe wrote: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.
The Times reports yoday that "it's a done deal":

http://www.nytimes.com/2012/05/01/busin ... inery.html

Brief passage:

  • Delta Air Lines said on Monday that it had agreed to buy a refinery near Philadelphia from ConocoPhillips to offset the risk of higher jet fuel prices.

    Delta said that it would spend $150 million to acquire the Trainer refinery, which has been shuttered for six months, after receiving $30 million from the state of Pennsylvania as part of a deal to support job creation.

    The airline said it would spend $100 million more to refurbish the plant to increase its output of jet fuel.
Looking at a map of Trainer PA courtesy of Mr. Google, it appears that rail access to the facility is over the Amtrak NEC, where anyone here knows freight operations, to say the least, are "restricted". Certainly coming as no surprise, the facility can be served by ocean going vessels, which leads one to believe that the most ready source of crude would be from guess where.....the Middle East.

Now the question can be put on the table; is there anything regarding the properties of Bakken that will make a more delightful (or more economically refined) brew that 777's and 787's will enjoy having a "chug a lug" with such as distinct from crude drawn from another source. In view of the limited rail access to the facility - even if these trains were line-hauled by CSX over the B&O and interchanged to CRSA for absolute minimal operation over the Amtrak Corridor, I cannot envision that rail would be the carrier of choice when ocean transport is right at the back door.
 #1042515  by JayBee
 
The closed refinery at Westville, NJ is receiving trainloads of Bakken Oil that must traverse a short portion of the NEC from the former Reading to Camden, NJ. Typically nearby refineries are interlinked with product pipelines to share intermediates that can be excess to local requirements. If that's not the case it would be easy to barge the oil 13 miles down the Delaware from Westville to Trainer. None of the East Coast refineries are running pure Bakken Light. All using it so far are blending it with heavier grades of Crude, typically around 30% Bakken. Bakken Crude being Light and Sweet is much easier to refine into Gasoline, Diesel, and Jet Fuel, than heavier crudes that require more steps of processing, and equipment that most East Coast refineries lack.
 #1048853  by Gilbert B Norman
 
Today observed a WW train of private owner tanks that were placarded 1987.

An MTY return of a Bakken Crude train or something else passing BNSF Chicago Sub MP 18.20.
 #1048864  by JayBee
 
Gilbert B Norman wrote:Today observed a WW train of private owner tanks that were placarded 1987.

An MTY return of a Bakken Crude train or something else passing BNSF Chicago Sub MP 18.20.
UN 1987 is the placard for Denatured Ethanol.
 #1048866  by Gilbert B Norman
 
Then I still await an observation of a Bakken Crude train to pass 18.34 (I'm not sitting out @ trackside all day; I DO have a life beyond railfanning).

This leads to another question; these BNSF trains of placated HAZMAT being handled in tank cars always have a covered hopper in consist - usually on the head.

What's that for, anyone?
 #1048889  by gokeefe
 
I think that's a required buffer car, they might also be transporting fracking sand, but if I recall correctly the primary purpose it to act as a buffer car between the engines and the tank cars (as required by law).
 #1048992  by rch
 
Gokeefe is correct. Loaded and residue ethanol tank cars have certain restrictions when it comes to train placement. In the case of either loads or empties, the cars "must not be next to engine, occupied caboose or business car." In the case of loads, "the placarded car must not be nearer than the 6th car from an engine or occupied caboose/business car. If the train does not have at least five buffer cars, then all available buffer cars must be placed between the placarded car and the engine.When occupied caboose/business car is in the train, the available buffer cars must be equally divided to protect both the engine and occupied caboose/business car from the hazardous material shipment."

When you see covered hoppers used as buffer cars in unit ethanol trains, it is extremely unlikely they are transporting frac sand or anything else that's bound for the same destination as the ethanol. When I deal with ethanol trains, either delivering them to or picking them up from the unloading facility, the buffer cars stay with the tank cars. So, there's no telling what is or was in those cars most of the time since it's inconsequential. They merely serve the purpose of isolating the placarded load from the head end and DP engines.
 #1049011  by toolmaker
 
Recently I saw a picture of a CP oil train using a buffer car that I hadn't see before. It was a open hopper with a gravel load.
 #1049304  by gokeefe
 
Yesterday, as discussed and documented in this thread I had the opportunity to witness in person the arrival of the shale oil revolution to Northern New England in the form of a ~100 car unit train of North Dakota crude oil sent via PAR through Winthrop, ME (ex-MEC "Back Road") to St. John, NB.

It is truly astonishing to see how quickly the world can change with the simple assembly and routing of some tank cars and locomotives.

I am looking forward to seeing gas at levels below $3.50/gallon in the near future in our area.
 #1049505  by Gilbert B Norman
 
Mr. O'Keefe, I think it is wonderful and amazing to see that North America will soon be, if not already, a "net exporter" of curde - and that railroad transportation for the moment, and maybe, just maybe for a long time to come, is an integral part of its distribution.

However, we must recognize that Middle East crude is far easier to extract than is the "fracking" process needed for the newly extracted sources (come on, geologists and their "massahs" have known the stuff has been there for years) results in a much higher extraction cost per barrel than does Middle East and its requisite ocean shipping (even factoring in that someone could be aiming their popguns at someone and "round the Cape" rather than through the Suez may be necessary from time to time).

All told, if the Sheik of Araby decides the price of crude is too high, Allah will tell him to flood the market to get the price at a level where his brew is price competitive.

Disclaimer: author holds long positions XOM RDSA
Last edited by Gilbert B Norman on Tue May 29, 2012 9:25 am, edited 2 times in total.
 #1049515  by gokeefe
 
Gilbert B Norman wrote:All told, if the Sheik of Araby decides the price of crude is too high, Allah will tell him to flood the market to get the price at a level where his brew is price competitive.

Disclaimer: author holds long positions XOM RDSA
Mr. Norman,

Here are my thoughts regarding market mix.

1. You are entirely correct that the extraction cost per barrel for typical Arabian light sweet crude is indeed very low. Basically in many places it's surface oil and I have indeed seen photos from Kurdistan (Iraq) showing places where the oil still pools naturally on the ground (and has yet to be extracted).

2. As of this very moment the Saudis are pumping at about 10 - 10.5 million barrels per day (close to their peak theoretical capacity of 12.5 million bpd). What is interesting to note is that the last 2 million bpd of production is not as cheap as the first 10. I don't know the exact details but my understanding is that these additional barrels are in fields which are more expensive (by their standards) for them to extract, and they have a lead time of 90 +/- days to resume production. In effect this means that the Saudis are pumping close to or at their ideal technical capacity.

3. Bottom line: no one is presently capable of "flooding the market". Virtually all available economic capacity is in production and what is left is marginal at best. The example you may be thinking of, which occurred in 1985 when the Saudis "opened the gusher" and crushed the Soviet Union's market for oil exports is no longer possible today due to the present utilization levels of production.

Because Arabian crude is priced in a similar (and more politically sensitive) bracket as "Brent" crude I think that American crude is going to have an advantage for quite some time to come. This in effect represents a restoration of the "way things were" in the 1940s (stable U.S. energy exports powering the world) and in my opinion means the U.S. economy is in for a major period of expansion.

Obviously alternatives are always possible but I am having trouble seeing how becoming a net exporter isn't going to lead to major economic expansion.
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