Buffet and Icahn Benefit from Increasing Demand for Crude Oil Transport by Rail
Warren Buffett and Carl Icahn are reaping the benefits of surging demand for railroad tank cars to haul shale oil from beyond the reach of existing pipelines.
Buffett’s Union Tank Car Co. is working at full capacity and Icahn’s American Railcar Industries Inc. (ARII) has a backlog through 2014.
The shale oil boom means that demand for Rail carloads of crude tripled last year to more than 200,000, and demand for tanks designed for it soared.
Is it cheaper, and or, safer to transport by rail than pipe?
If it is cheaper than why even bother with pipelines at all? If not, then why dont Buffett and Icahn pool their resources and invest in developing a pipeline?
I've been saying since 2010..
The real money is in the logistics..
like the Coal Rush, the money is in shipping the coal, hauling the coal...
Logistics, logistics, Logistics..
But logistics is capital intensive to invest in, requiring purchases of expensive assets before any real money can start to be made.
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