The amount of oil being shipped by rail has increased 50-fold since 2010
This week, for the first time ever, the Energy Information Administration released data on how much crude oil is being shipped by rail across the United States.
And the numbers are amazing.
US railroads now carry 33.7 million barrels of oil a month across the country. This is a 50-fold increase in the amount of crude being shipped by rail (CBR) from the 630,000 barrels in January 2010.
The EIA says that "the flexibility and adaptability of CBR has facilitated new flows from the Midwest to the East Coast and West Coast, as well as from the Rocky Mountains to the East Coast and Canada." Previously, most crude produced in the United States was moved by pipeline from Cushing, Oklahoma.
The increase in crude by rail is great for the industry — it can get the massive amounts of crude now being produced where it needs to go using infrastructure that already exists.
But it has its downsides. The ramp-up of crude-carrying trains has exposed the dangers of crude-carrying train derailments. They existed before, but there wasn't enough being shipped for it to pose a big risk.
Reuters' John Kemp explains the problem this poses for the railroads and the oil industry: Negotiations between the railroads, oil producers, refiners and the U.S. government about new crude-by-rail regulations and tank car safety standards boil down to the question of how to balance the safety imperative of withdrawing older and less secure tank cars as soon as possible against the commercial imperative of keeping them in service for longer to maintain tank car availability and keep the oil flowing.
The problem is that the risks are real, but minute for any one shipment. And the rewards are easy to calculate.
Safety seems to be making some gains, though. Reuters reported Wednesday that many of the gases in North Dakota crude that can make crude-by-rail crashes at higher risk of explosions will need to be removed before the oil is shipped.
It's a North Dakota rule, but Reuters' Ernest Scheyder writes that, "in the absence of concrete regulations from the U.S. Department of Transportation, North Dakota's new rules become the de facto national standard on the treatment of crude before tankcar loading." Read » | | | |
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