• 4 minutes Solar to Become World's Largest Power Source by 2050
  • 7 minutes Exxon Aims For $15-a-Barrel Costs In Giant Permian Operation
  • 12 minutes Read: OPEC WILL KILL US SHALE
  • 16 minutes U.S. Shale Output may Start Dropping Next Year
  • 10 hours Why U.S. Growers Are Betting The Farm On Soybeans Amid China Trade War
  • 1 min Trump to Make Allies Pay More to Host US Bases
  • 3 mins Tidal Power Closer to Commercialisation
  • 13 hours THE DEATH OF FOSSIL FUEL MARKETS
  • 21 hours Can OPEC CUT PRODUCTION FOREVER?
  • 18 hours Sounds Familiar: Netanyahu Tells Arab Citizens They’re Not Real Israelis
  • 1 day European Parliament demands Nord-Stream-ii pipeline to be Stopped
  • 19 hours US-backed coup in Venezuela not so smooth
  • 1 day War on Emissions Gains Traction
  • 13 hours Washington Eyes Crackdown On OPEC
  • 22 mins Biomass, Ethanol No Longer Green
  • 18 hours this is why Climate Friendly Agendas Tread Water
U.S. Supermajors Could Form A New Oil Cartel

U.S. Supermajors Could Form A New Oil Cartel

According to an analyst at…

OPEC+ Production Cuts To Stay In Place Until June

OPEC+ Production Cuts To Stay In Place Until June

Saudi Oil Minister al-Falih has…

Railways Favouring Oil, Leaving Canada’s Record Grain Crop Stuck on the Prairie

As the boom in production of crude oil in North America has grown it has far exceeded the flow capacity offered by pipelines. Transporting oil by rail has proven an effective alternative and demand for rail car tankers has risen to record levels.

One problem is that much of the supply given over to meet the new demand has been taken from elsewhere, meaning that other commodities are losing out as railway operators favour crude oil shipments. A record harvest of wheat and canola last year, combined with the increased shipments of crude by rail, means that an estimated 3 million tonnes of grain are still stuck on the Canadian Prairie, awaiting transport to the grain buyers.

Keith Bruch, the vice president of operations for Paterson Global Foods Inc., claimed that shipments of grain are two months behind schedule due to a shortage of rail cars created by the increased demand to transport oil.

“It’s looking more and more that grain is becoming second choice to oil. The railways make decisions on where they put their power and crews to maximize revenue.”

Related article: DOT-111 Safety Major Issue in Crude-By-Rail Debate

Transport Canada reported that the number of rail cars carrying crude oil in 2012 was at 53,453, compared to just 143 in 2009, as the country’s two largest railway companies, Canadian National Railway Co. and Canadian Pacific, tap into the growing demand to ship crude oil created by rising production in Alberta.

Mark Hemmes, the president of Quorum Corp., which monitors the transportation of grain around Canada, explained that organising and allocating rail cars and labour for transporting grain and oil can take months of planning, meaning that the surge in demand from the oil industry has clashed with the unexpected surge in demand from the grain industry, and left railway operators struggling to respond.

Ed Greenberg, a spokesman for Canadian Pacific, said that “Grain is Canadian Pacific’s single largest commodity and therefore very important to our railway. We are responding to our grain customers as efficiently and quickly as possible.”

Bruch stated that grain buyers are getting angry as the delays are costing companies money. Some ships have been idling in Vancouver for weeks as they wait for grain to arrive, costing from C$12,000 ($10,700) to C$20,000 ($18,000) a day.

Sam Snyder, the director of corporate development for Grain Millers Inc., said that “moving crude by rail has definitely impacted our ability to supply our facilities.” He stated that carriers are trying to respond to this new demand from the oil industry and that it is difficult to tell whether or not it is just a “blip or the new standard.”

By. Charles Kennedy of Oilprice.com



Join the discussion | Back to homepage

Leave a comment

Leave a comment

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