It's a roaring business. In 2009, when Calgary-based Canadian Pacific Railway Ltd. started dabbling in crude oil transportation, it moved 500 of its black barrel-shaped cars out of the basin. Last year, its oil trains carried 13,000 cars and soon CP could be moving 70,000 cars or more a year out of the North Dakota Bakken tight-oil field alone.
With each tank car containing 650 barrels of oil, that's 126,000 barrels a day - a significant pipeline on rail.
Rail transportation is gaining traction for several reasons. For one, tight oil production is increasing rapidly and rail transportation can be scaled up quickly. Then there are pipeline bottlenecks due to rising production out of Western Canada and the Bakken - that are depressing oil prices in the U.S. Midwest and justifying rail's higher costs - and the controversy surrounding the Keystone XL expansion is pushing producers to look at all options.
Read Full Article
Keywords: Canadian Pacific Railway, CP, Crude Oil Transportation, Western Canada, Rail & Intermodal, Transportation & Distribution, Third-Party Logistics, Logistics, Chemicals & Energy, Canada
Timely, incisive articles delivered directly to your inbox.