EIA: Railroads move more crude oil in first half

By OGJ editors

Railroads moved 38% more US crude oil and petroleum products during the first half of 2012 compared with 2011, largely as a result of increased oil production from North Dakota's Bakken formation where there is limited pipeline capacity, the US Energy Information Administration said.

The number of rail tanker cars hauling oil and products totaled nearly 241,000 during January-June 2012 compared with 174,000 for the same period in 2011, according to the Association of American Railroads (AAR).

Rail deliveries of oil and products in June alone jumped 51% to 42,000 tanker cars from a year earlier. During June 2012, average weekly rail shipments of oil and products reached a record high of 10,500 tanker cars for the month. One rail tanker car holds about 700 bbl.

This would be equivalent to about 927,000 b/d of oil and products shipped, on average, during the first half of 2012 vs. 673,000 b/d for the same period in 2011.

In 2009, oil accounted for 3% of the combined deliveries in the oil and products category tracked by AAR. The trade group estimated oil now accounts for almost 30% in this category.

Shipping oil by rail costs about $10-15/bbl nationwide compared with about $5/bbl to move oil by pipeline, said estimates from Wolfe Trahan, a New York City-based research firm tracking freight transportation costs.

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