• 5 hours Russia Approves Profit-Based Oil Tax For 2019
  • 9 hours French Strike Disrupts Exxon And Total’s Oil Product Shipments
  • 11 hours Kurdistan’s Oil Exports Still Below Pre-Conflict Levels
  • 13 hours Oil Production Cuts Taking A Toll On Russia’s Economy
  • 15 hours Aramco In Talks With Chinese Petrochemical Producers
  • 16 hours Federal Judge Grants Go-Ahead On Keystone XL Lawsuit
  • 18 hours Maduro Names Chavez’ Cousin As Citgo Boss
  • 1 day Bidding Action Heats Up In UK’s Continental Shelf
  • 1 day Keystone Pipeline Restart Still Unknown
  • 1 day UK Offers North Sea Oil Producers Tax Relief To Boost Investment
  • 1 day Iraq Wants To Build Gas Pipeline To Kuwait In Blow To Shell
  • 2 days Trader Trafigura Raises Share Of Oil Purchases From State Firms
  • 2 days German Energy Group Uniper Rejects $9B Finnish Takeover Bid
  • 2 days Total Could Lose Big If It Pulls Out Of South Pars Deal
  • 2 days Dakota Watchdog Warns It Could Revoke Keystone XL Approval
  • 2 days Oil Prices Rise After API Reports Major Crude Draw
  • 3 days Citgo President And 5 VPs Arrested On Embezzlement Charges
  • 3 days Gazprom Speaks Out Against OPEC Production Cut Extension
  • 3 days Statoil Looks To Lighter Oil To Boost Profitability
  • 3 days Oil Billionaire Becomes Wind Energy’s Top Influencer
  • 3 days Transneft Warns Urals Oil Quality Reaching Critical Levels
  • 3 days Whitefish Energy Suspends Work In Puerto Rico
  • 3 days U.S. Authorities Arrest Two On Major Energy Corruption Scheme
  • 3 days Thanksgiving Gas Prices At 3-Year High
  • 3 days Iraq’s Giant Majnoon Oilfield Attracts Attention Of Supermajors
  • 3 days South Iraq Oil Exports Close To Record High To Offset Kirkuk Drop
  • 4 days Iraqi Forces Find Mass Graves In Oil Wells Near Kirkuk
  • 4 days Chevron Joint Venture Signs $1.7B Oil, Gas Deal In Nigeria
  • 4 days Iraq Steps In To Offset Falling Venezuela Oil Production
  • 4 days ConocoPhillips Sets Price Ceiling For New Projects
  • 6 days Shell Oil Trading Head Steps Down After 29 Years
  • 6 days Higher Oil Prices Reduce North American Oil Bankruptcies
  • 6 days Statoil To Boost Exploration Drilling Offshore Norway In 2018
  • 7 days $1.6 Billion Canadian-US Hydropower Project Approved
  • 7 days Venezuela Officially In Default
  • 7 days Iran Prepares To Export LNG To Boost Trade Relations
  • 7 days Keystone Pipeline Leaks 5,000 Barrels Into Farmland
  • 7 days Saudi Oil Minister: Markets Will Not Rebalance By March
  • 7 days Obscure Dutch Firm Wins Venezuelan Oil Block As Debt Tensions Mount
  • 7 days Rosneft Announces Completion Of World’s Longest Well
Alt Text

$40 WTI Is Now More Realistic Than $60

According to one analyst, oil…

Alt Text

Saudi Oil Exports Fall To Six-Year Low In September

Saudi crude exports in September…

Alt Text

Can Oil Majors Continue To Beat Estimates?

As oil prices claw their…

James Burgess

James Burgess

James Burgess studied Business Management at the University of Nottingham. He has worked in property development, chartered surveying, marketing, law, and accounts. He has also…

More Info

Pipeline Companies Struggle Against Rising Competition from Rail

Pipeline Companies Struggle Against Rising Competition from Rail

Despite the fact that new, stricter regulations on the transport of hazardous materials by rail, introduced following the derailment and explosion of a train carrying crude oil through Quebec in July, will see rail transport costs increase, the volume of crude travelling by rail across North America is expected to rise greatly in the coming year.

Delays associated with the development of pipelines, and the process of receiving permits, have seen more and more oil transported to refineries via rail roads in recent years, especially as the amount of oil being produced in North America has grown.

TransCanada believes that rail shipments of oil from Western Canada will increase by 400% from around 224,000 barrels a day before the end of next year, as new loading terminals are built to put more oil-sands onto railcars. Wood Mackenzie has also claimed that the amount of oil shipped to the east and west coasts from the Bakken fields will increase by a factor of four this year.

Related article: North Dakota in Spotlight after Oil Spill

Alex Pourbaix, the president of energy and oil pipelines at TransCanada, stated that the only reason railroads were becoming more popular, was because pipelines were taking too long to receive approval. The fact is that pipelines actually offer a safer, cheaper method of transporting oil, but due to the delays, demand for oil transportation has outgrown the capacity that pipelines can supply.

Oil by Rail

In the wake of the 6th of July derailing in Lac-Megantic, Quebec, which killed 47 people, Transport Canada introduced emergency directives to control the transport of hazardous materials, such as crude oil, by rail. The department is now considering even stricter rules for hazardous materials, and it is expected that such rules will force large capital investiture by rail companies, and therefor boost the cost of transporting by rail.

Jerry Swank, a managing partner at Swank Capital, explained to Bloomberg that “you’re going to see a massive flood of spending to get ahead of these government regulations,” as rail companies try and prepare for any tighter laws on safety.

Related article: From Peak Oil to Fossil Fuel Euphoria

Harold Hamm, the chief executive at Continental Resources, has said that his company is now using rail cars to move 75% of its crude, mainly due to the lack of pipeline capacity.

“The good thing about it is it goes to the market faster and directly where you want it and it doesn’t have to go the pipeline route.”

The increasing competition from rail operators has actually made it difficult for several pipeline companies to secure long-term contracts from oil producers, forcing them to postpone, or cancel, projects for the construction of new pipes.

By. James Burgess of Oilprice.com




Back to homepage


Leave a comment

Leave a comment




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