Can the farmer and oilman be friends on the rail?

The statistics of 2013 speak for themselves: record grain output in the Canadian Prairies of 76 million metric tons; and record crude-by-rail CBR loadings from neighboring Alberta and Saskatchewan of 250,000 b/d.With Canadian oil sands production continuing to rise there’s a growing concern of a grain versus crude oil standoff for rail space and locomotives. Yet last year, neither the number of grain hoppers nor the tank cars being hauled by Canadian Pacific and Canadian National Railway increased significantly to keep pace with the unprecedented demand to move both commodities from land-locked hinterlands to consuming markets.While there are no new hoppers to be delivered over the short term, the order books of tank car manufacturers are bulging with 40,000 additional cars due to be delivered by late 2015 to carry more crude from Western Canada. “There is really no reason for an emerging conflict between oil producers and grain growers in Canada,” said Blair Rutter, executive director of Western Canadian Wheat Growers Association. “There is room for co-existence. But logistics, which has a make-or-mar bearing on fetching a competitive price, has to keep up.”There may be room for peaceful co-existence, however, this did not stop the government from specifically making a rule favoring wheat growers.

via New Frontiers: In Canada, can the farmer and oilman be friends on the rail? « The Barrel Blog.

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