UP Bakken crude oil train derails in Oregon
A Union Pacific train carrying 96 carloads of Bakken crude to a refinery in Tacoma, Wash., derailed in Mosier, Ore., on June 3.
A Union Pacific train carrying 96 carloads of Bakken crude to a refinery in Tacoma, Wash., derailed in Mosier, Ore., on June 3.
In a rarity in Congress, the U.S. Senate unanimously passed the Railroad Emergency Services Preparedness, Operational Needs, and Safety Evaluation (RESPONSE) Act on May 11, 2016.
A few years back, crude-by-rail (CBR) “emerged as the go-to fix that enabled pipeline-constrained shale regions to move fast-increasing volumes of oil to market,” writes RBN Energy LLC analyst Housley Carr in Slow Train Coming: What’s Next for CBR. “But changes in the market—lower oil prices, slowing/declining production, new pipeline capacity—have been challenging and undermining CBR.”
As RBN Energy LLC analyst Sandy Fielden describes in Slow Train Coming: The Decline and Fall of East Coast Crude by Rail, the economics of shipping crude oil out of North Dakota’s Bakken region, compared to importing equivalent crude, are having a detrimental impact on crude-by-rail (CBR) shipments to the East Coast.
According to the latest Energy Information Administration (EIA) monthly Drilling Productivity Report, crude production from the Niobrara shale region in Colorado and Wyoming, which peaked at 491 Mb/d (million barrels per day) in April 2015, is forecast to decline by roughly100 Mb/d to 388 Mb/d through March 2016, in response to falling crude prices and lower drilling activity.
The crude by rail (CBR) boom that less than two years ago preoccupied the industry and generated intense regulatory scrutiny is, for all intents and purposes, over, according to a new analysis by RBN Energy.
Irving Oil Ltd., operator of Canada’s largest crude oil refinery, has stopped importing crude oil sourced from the Bakken shale formation in North Dakota and shipped by rail in favor of cheaper crudes from such producers as OPEC, “reflecting a shift in crude costs affecting East Coast refiners during a global slump in oil prices,” the Wall Street Journal recently reported.
There is “big potential” to expand crude by rail shipments to West Coast ports and to California, but building the infrastructure “has proven painstakingly slow,” writes RBN Energy LLC analyst Rusty Braziel.
Bakken crude oil hauled in unit trains may disappear by 2017, according to an analysis conducted by RBN Energy LLC.
Based on data from the Surface Transportation Board (STB) and Petroleum Supply Monthly, the U.S. Energy Information Administration has reported that rail and pipeline shipments of crude oil from the Rocky Mountain region have steadily increased as regional crude oil production has increased.