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.
California, the nation’s largest gasoline market, has cut its oil-by-rail volumes from Canada by 86% this year while buying more crude made in America.The most populous U.S. state received 3,142 barrels a day by rail from Canada in July, down from 6,669 in June and a peak of 22,871 in December, California Energy Commission data show. Meanwhile, it more than doubled the oil delivered by rail from Colorado, took a record amount from Utah and brought in more barrels from New Mexico and North Dakota.The oil-by-rail shipments have surged to a seasonal record as the state’s refiners, lacking direct pipeline access, turn to trains to bring in production from U.S. shale formations. The boom has boosted domestic output to the highest level in 28 years, bringing the nation closer to energy independence.“In the California scheme of things, the change in Canadian rail volumes isn’t that big, a drop in the bucket for an average refinery running at 200,000 barrels a day,” James Williams, president of WTRG Economics in London, Arkansas, said by telephone Sept. 5. “But in the ‘I’m a Canadian getting way too little for my oil’ scheme of things, any opportunity to export a barrel to the States has got to be welcomed.”
via California slashes oil-by-rail shipments from Canada by 86% and goes domestic | Financial Post.
Strong Canadian crude prices and loading terminal maintenance have slowed down the oil sands’ crude-by-rail boom, industry players said on Monday, after government data showed crude exports by rail dipped in the second quarter of 2014.Figures from the National Energy Board released late on Friday showed Canadian crude exports by rail fell 1.3 percent to 163,063 barrels per day in the second quarter of this year, compared with 165,254 bpd in the first quarter.Exports in the three months to June were still up 22 percent on the same period a year earlier, but the dip belies industry predictions of breakneck growth. The Canadian Association of Petroleum Producers has forecast that crude-by-rail loading capacity will exceed 1 million bpd by year-end.Crude-by-rail industry sources said the shutdown of Canexus Corp’s Bruderheim loading terminal near Edmonton, Alberta, had weighed on export volumes.The facility, Canada’s first unit train crude terminal that started operating last December, was shut down on June 15 to expand capacity to 70,000 bpd.Bruderheim resumed activity on Sept. 5, according to a report from energy intelligence firm Genscape, when 24 rail cars or roughly 12,600 barrels of crude were loaded.Tighter differentials between Canadian and U.S. benchmark crude prices in the second quarter also made shipping crude by rail to markets in the United States less profitable for producers and midstream companies.
via Canadian crude-by-rail export volumes dip in second quarter | Reuters.
Eighteen oil trains a week move along the Washington side of the Columbia River Gorge, newly released data shows, a figure that could more than double if a proposed Vancouver, Wash., oil train terminal opens.BNSF Railway Co. notified Washington authorities that it hauled 19 oil trains through Klickitat County in one week between May 29 and June 4, the state’s most heavily traveled route. All but one continued on through the gorge to Clark County, en route to Seattle and Portland.At that pace, nearly 1,000 oil trains would move through the Columbia Gorge annually. That could grow to almost 2,500 trains a year – carrying between 70,000 and 90,000 barrels of oil apiece — if a major Vancouver oil train terminal proposed by Tesoro-Savage is approved. And that doesn’t include crude oil from Utah hauled by Union Pacific on the Oregon side of the gorge.The traffic is a striking increase from 2007, when almost no crude oil moved around the country’s rail system. An ongoing boom in North Dakota continues pushing an unprecedented amount of oil onto the rails, leading to a string of accidents that’s raised safety concerns nationwide.
via With 18 oil trains weekly, Columbia River Gorge is the key route for Pacific Northwest's crude-by-rail | OregonLive.com.
Disclosures from railroads about volatile oil shipments from the Northern Plains show dozens of the trains passing weekly through Illinois and the Midwest and up to 19 a week reaching Washington state on the West Coast.The Associated Press obtained details on the shipments Tuesday under public records requests filed with state emergency officials. They offer the most detailed insights to date on the increasing volumes of crude being moved across North America by rail in the wake of a domestic shale oil boom. The disclosures from railroads also underscore an unsettling fact: Many of those shipments pass through highly urbanized areas where the consequences of an accident would be most severe.
via Oil train information shows traffic is heavy | The Salt Lake Tribune.
California leaders have included several safety provisions in this year’s state budget with the aim of preventing toxic spills and fires as oil companies ship more crude oil on trains through cities and wildland areas.Beginning in the coming fiscal year, the state will apply a 6.5-cent fee on oil companies for every barrel of crude that arrives in California on rail, or that is piped to refineries from inside the state. The resulting funds, estimated at $11 million in the first full year, will be allocated for oil spill prevention and preparation work, and for emergency cleanup costs. The efforts will be focused on spills that threaten waterways, and will allow officials to conduct response drills.The budget also separately includes funds to hire seven more rail safety inspectors for the California Public Utilities Commission, PUC spokeswoman Terrie Prosper said.
via California to impose fee on crude oil rail shipments; funds to be used for spill prevention, cleanup – Business – The Sacramento Bee.
As politicians debate the dangers of a massive increase in oil carried by rail in North America, railroads and energy producers are considering the same for natural gas.Buoyed by the unexpected success of crude by rail, companies are beginning to consider transporting natural gas as remote drilling frontiers emerge beyond the reach of pipelines, executives said.Natural gas by rail is years away and likely to face strong public resistance after a series of explosive crude-by-rail accidents. But the potentially multibillion-dollar development could connect gas-rich regions like North Dakota with urban centers, presenting an opportunity for railroads, drillers and tank car makers already cashing in from hauling oil on trains.It could also be a cure for environmentally unfriendly flaring, a growing problem in far-flung areas where more than $1 billion of natural gas produced alongside oil is burned off each year for lack of processing plants or pipelines that can take years to build.”Everyone is talking about moving gas by rail,” said David Demers, chief executive officer of Westport Innovations, which is developing technology for natural gas-powered locomotives. “They see this as a large opportunity and have their pencils out to see how it could work.”Demers said Berkshire Hathaway’s BNSF was one railroad considering the move.
via After oil, natural gas may be next on North American rails | Reuters.
Grain handlers are lobbying the Canadian government for even stricter rules requiring railroads to allocate thousands of railcars to them each week in hopes of stopping an unprecedented crop logjam from getting worse.Tougher rules could ensure that U.S. and other buyers have ample access to Canadian grains. They would also give grain handlers priority over other shippers, including oil companies, which have moved a rapidly growing, though still relatively small, volume of crude by rail.A record-large harvest and frigid weather had snarled the transportation system last fall and winter, leaving millions of tonnes of grain stuck in farm bins.
via Grain handlers seek stricter rail rules to avoid logjam | Canada | Reuters.
Global Partners LP NYSE: GLP today announced that it has entered into an agreement with Meadowlark Midstream Company, LLC “Meadowlark” whereby Meadowlark will build, own and operate new a crude oil transportation system. When completed, the system will include a truck unloading station with 55,000 barrels of tankage on Meadowlark’s Divide Gathering System, as well as a 47-mile pipeline serving Global’s crude oil storage facility at Basin Transload’s Columbus rail loading terminal in Burke County, North Dakota. Crude oil delivered to this rail terminal has single line haul rail access to Global’s Albany, NY terminal and can also access other rail-serviced terminals throughout the United States. The project is expected to be operational by the second quarter of 2015.In connection with this agreement, Global has commenced construction of an additional 176,000 barrels of tankage at the Columbus facility, which will bring total capacity to 446,000 barrels.
via Global Partners Announces Crude Oil Transportation Agreement with Meadowlark Midstream Company – WSJ.com.
Phillips 66 recently agreed to purchase a crude oil terminal near Beaumont, Texas, from UNOCAL. The transaction is expected to close in the third quarter pending regulatory approvals. With the capacity to store 7.1 million barrels, the Beaumont facility will be the largest terminal in Phillips 66’s portfolio, company officials said in a press release. The terminal features rail and truck loading/unloading facilities, two marine docks and one barge dock.”Given our expectations for increasing volumes of North American crude oil movements into the Gulf Coast region and growth in refined product exports, the Beaumont Terminal is well positioned to serve this growing market while providing significant expansion potential,” said Phillips 66 President Tim Taylor.Meanwhile, Univar Inc. announced it broke ground on a new 52,000-square-foot facility in Elmendorf, Texas, in the Alamo Junction Rail Park that’s currently under construction and is expected to be fully operational by year’s end.The facility will enable Univar to better serve customers at the north end of the Eagle Ford Shale, company officials said in a press release. The company will rely on the nearby rail park — to be served by BNSF Railway Co. and Union Pacific Railroad — to bring product into the facility, as well as blend or package and distribute materials.
via Rail News – Crude by rail: Facility developments progress in Texas, North Dakota. For Railroad Career Professionals.