Oil by Rail: On the Rise?

With all of the political heat and opposition to the Keystone XL pipeline, it may be time to explore other modes of transportation for “Texas Tea” in the US and Canada.

In the article “Analysis: Crude-by-rail carves out long-term North American niche” by Nicole Mordant, the use of American and Canadian railways is explored.  Railroads are a great way to move many commodities across the continent, oil included.

Since 2007, oil shipments in the US have grown from around 11,000 barrels to over 300,000 barrels per day.  This growing trend, combined with the continued rise in inter-modal transportation should be great for the rail industry.

While transporting oil via rail can be four times as expensive as using pipelines, once the high fixed costs and political barriers that the implementing pipelines and carry are factored in, utilizing already-existing railroads sounds like an option worth pursuing.

Rail was the main choice of oil transportation before pipelines were around, and it appears that the industry may be heading back in the direction of its past.

Source:  http://www.reuters.com/article/2012/11/04/us-railways-oil-northamerica-idUSBRE8A30AX20121104


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