• 4 minutes Oil Price Editorial: Beware Of Saudi Oil Tanker Sabotage Stories
  • 7 minutes Mueller Report Brings Into Focus Obama's Attempted Coup Against Trump
  • 11 minutes Magic of Shale: EXPORTS!! Crude Exporters Navigate Gulf Coast Terminal Constraints
  • 14 minutes Wonders of Shale- Gas,bringing investments and jobs to the US
  • 2 hours Evil Awakens: Fascist Symbols And Rhetoric On Rise In Italian EU Vote
  • 1 hour Is $60/Bbl WTI still considered a break even for Shale Oil
  • 3 hours Theresa May to Step Down
  • 6 hours Old - New Kim: Nuclear Negotiations With U. S. Will Never Resume Unless Washington Changes Its Position
  • 3 hours IMO 2020 could create fierce competition for scarce water resources
  • 6 hours India After Elections: Economy And Hindu Are The First Modi’s Challenges
  • 3 hours IMO2020 To scrub or not to scrub
  • 7 hours Total nonsense in climate debate
  • 3 hours Devastating Sanctions: Iran and Venezuela hurting
  • 11 hours Trump needs to educate US companies and citizens on Chinese Communist Party and People's Liberation Army. This is real ECONOMIC WARFARE. To understand Chinese warfare read General Sun Tzu's "Art of War" . . . written 500 B.C.
  • 227 days Epic Fail as Solar Crashes and Wind Refuses to Blow
  • 5 hours Apple Boycott in China
  • 5 hours Compensation For A Trade War: Argentina’s Financial Crisis Creates An Opportunity For China
  • 34 mins Level-Headed Analysis of the Future of U.S. Shale Oil Industry
Alt Text

Why Oil Is Still Underpriced

Oil prices are pulled in…

Alt Text

Saudi Arabia Scrambles To Calm Oil Markets

Saudi Arabia stated that it…

Alt Text

No, The Oil Glut Hasn’t Disappeared

Weaker than expected oil demand…

Daniel J. Graeber

Daniel J. Graeber

Daniel Graeber is a writer and political analyst based in Michigan. His work on matters related to the geopolitical aspects of the global energy sector,…

More Info

Trending Discussions

Smart U.S. Oil Money is on Rail

U.S. oil production is breaking records standing for more than 20 years. With the International Energy Agency suggesting the boom won't last, smart investors will get behind rail as the delivery tool of choice.

The U.S. Energy Information Administration expects domestic crude oil production by 2016 will be close to the 1970 record of 9.6 million barrels per day. In November, U.S. oil production of 8 million bpd was the highest monthly total in 25 years.

Similar trends are developing in Canada and there aren't enough pipelines in service to keep up with production gains. Energy companies instead are turning to rail to get their crude oil to market.

Related article: Canadian Arctic Port Presses Forward on Oil Exports

The Association of American Railroads said delivery of petroleum and petroleum products in the United States increased 18.6 percent for the week ending Dec. 7. That's about 1 million barrels of oil. For the year, 465 million barrels of petroleum and petroleum products moved on the U.S. rail system so far, a 32 percent increase from 2012.

By Wednesday, Dakota Plains Holding, an oil transit company working in the Williston basin of North Dakota, said it expects to have a new rail terminal up and running in the state's Mountrail County. Its Pioneer Terminal expansion project will feature 180,000 barrels of oil storage capacity and eventually have 8,000 bpd in takeaway capacity.

"With price spreads and throughput volumes at their current high levels, and with our newly expanded Pioneer Terminal soon allowing higher throughput volumes, we believe we will be well-positioned for profitability as we move forward," Chairman Craig McKenzie said in a statement.

And he's not alone. BNSF said it's invested $4.3 billion in its rail capacity in the United States this year. More than $200 million of that was allocated to the North Dakota rail system in August. Downstream, Philadelphia Energy Solutions said most of the Bakken crude oil processed at its Pennsylvania refinery comes by rail.

The North Dakota Industrial Commission said oil production in October, the last full month for which data is available, was 941,637 bpd, an all-time high. NDIC Director Lynn Helms said production would've been even higher, though autumn rains closed down some of the roads leading to work sites.

Related article: Is a final Decision on Keystone XL Close at Hand?

With a design capacity of 830,000 bpd, the Keystone XL pipeline is meant to help get some of the new North American crude oil to regional refineries. Facing widespread opposition and years of delays, however, one of the committed shippers is getting cold feet, saying the project isn't needed.

The IEA said last month North American oil production starts to decline in the 2020, suggesting any shipper commitments for pipelines, planned or otherwise, may be for naught over the long term horizon. For North Dakota, the No. 2 oil producer in the country, rail is enough.

"Crude oil take away capacity is expected to be adequate as long as rail deliveries to coastal refineries keep growing," the NDIC director said.

By. Daniel J. Graeber of Oilprice.com




Download The Free Oilprice App Today

Back to homepage

Trending Discussions


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News