Posted on 03/19/2012 5:20:25 AM PDT by thackney
While the haggling continues over oil pipelines across North America and bottlenecks intensify in the U.S. mid-continent, Canadian Pacific Railway, or CPR, is in its fourth year of turning trains into a significant method of crude transportation.
The Calgary-based company, determined to build an edge on its rival Canadian National Railway, has been leading the way in shipping crude from the Bakken field in North Dakota and Saskatchewan.
It started at 500 rail cars in 2008, each holding 650 barrels (about 890 barrels per day), expanded to 13,000 cars last year (23,150 bpd) and is now targeting 70,000 cars (125,000 bpd) from the North Dakota Bakken alone.
With North Dakota production headed for about 600,000 bpd in six years, the volumes being carried by rail are significant and, in Canadian Pacific’s view, have the potential for even greater expansion.
Not waiting for XL
The U.S. State Department estimated that rail capacity in the region reached almost 300,000 bpd in 2011 as producers look for transportation options rather than waiting for a resolution of TransCanada’s Keystone XL problems. CPR said earlier in March that it should start shipping crude this summer from a new 35,000 bpd terminal being constructed by Texas-based U.S. Development Group at Van Hook, N.D., 100 miles east of Williston.
The railway, which has exclusive rights to use the terminal, is making infrastructure improvements on its North Dakota network as part of a C$100 million investment on tracks in the U.S. Midwest.
The terminal will handle 15 crude unit trains per month initially and is expected to double that capacity.
Tracy Robinson, CPR’s energy and marketing vice president, told reporters that the business has grown “much faster than we ever expected.”
“We have always thought there was some potential. What really gave us the opportunity was the technological enhancement that allowed shale drilling on a more economical basis. It started first for us in the Bakken area, where there was suddenly a lot of oil that had no mode of transportation to get into the market place,” she said.
Robinson said CPR is developing multiple-origin train loading points in North Dakota and multiple-destination options for customers in Eastern Canada, the Northeast U.S., the Gulf Coast and the U.S. Midwest and is now eying a possible test shipment to the U.S. West Coast.
In 2008, Canadian National Railway was making bold predictions that it could move hundreds of thousands of barrels per day from the oil sands, using existing tracks, to the U.S. Gulf and West coasts.
But it is not willing to talk specifics beyond saying it is transporting light, heavy and oil sands crude from Western Canada to “various markets.”
Robinson said CPR is also eager to gain a slice of shipments out of the oil sands, confident that rail can play a role.
John Heida, a consultant at Purvin & Gertz, told the National Post that he expects rail will operate on a “case-by-case” basis rather than offering an industry-wide solution.
Robinson defended the safety record of railways, noting that if a rail car breaks open the most it can spill is 650 barrels, but added that the railways will supplement rather than replace pipelines.
Why does this remind me of Dagny Taggart?
These are super jumbo cars.
Hat’s off to CP !
Just imagine all the jobs that creates. Permanent jobs, not just tempory ones.
Just imagine all the jobs that creates. Permanent jobs, not just tempory ones.
I doubt they are permanent. Pipelines will get built; it is far cheaper and safer to transport by pipeline.
The question is will the pipeline go south to US refineries, or west for export to Asia.
There will be continued need for rail, but I suspect it will move around as pipelines get built and new oil production comes on-line.
I hope every train that reaches Texas refineries toots its horn on the way by the freakin’ White Hut in DC.
BNSF is also moving a lot of this oil...owned by....Warren Buffet.
I remember reading about a refinery that was going to be built south of Sioux Falls, SD. specifically to process the Balkan oil. What do you know about that ?
CPRS probably brings a lot of this oil to the refineries southwest of Minneapolis. I am sure the BNSF does not like the competition.
Who is John Galt ?
“I doubt they are permanent. Pipelines will get built; it is far cheaper and safer to transport by pipeline.”
Yep, far safer by pipeline than by rail. Yet the envirowackos stop the pipeline because they are concerned with its environmental danger? Not to mention that there is already a major pipeline across the land above the Nebraska aquifer that they ignore in their dishonest arguments.
The Demmiroids are far more concerned with preventing the USA from becoming less dependent on imported oil from hostile nations and lining the pockets of Warren Buffet, a friend of Obama.
As usual the Corrupt Liberal Media is ignoring this scandal to protect one of their own in the White House.
http://www.youtube.com/watch?v=qKdScVerrBU&feature=player_embedded
They got their air permit last September, but I haven't heard anything more about them lately.
I suspect the economic conditions for building it is not good right now. We are refining more than we are using; we are now a net exporter of refined product but we still import ~9 million barrels of crude each day.
If the Hyperion refinery gets built, we will either be consuming more, exporting more, or shutting down more refineries.
I hate these mornings when I go for the coffee and there is none to be had.
We cannot build a pipeline because it is a danger to the environment, but 650 rail cars streaming across the country where a misplaced railroad spike or hunk of metal can cause a national tragedy is deemed ok because the company is owned by a RAT contributor?
I would think a federal mandate requiring only one blend of crude would lower prices.
I know it is a state issue but so is everything else the fed seems to be trampling on, so why would this be any different?
I think you meant gasoline, not crude oil.
I need a good cup. Nobody made the good stuff this morning. Just some stinky Maxwell House.
One Blend of Gasoline would be great for lowering cost at the pump. These stupid seasonal blends are as dumb as daylight savings time.
Pick one optimal blend, then stick to it, or better yet, just get out of the way.
Still puzzling why there are no new refineries under construction. Guess we’re too busy building windmills and squeezing corn.
It is far cheaper to expand existing refineries than build new ones. Plus, existing refineries are already connected to pipeline delivering inputs and and carrying away products.
On top of that, our expansions and upgrades of existing refineries over many years have raised the capacity to exceed our domestic demand. We now refine more than we consume. The excess is exported. 
The envirokooks are just hoping (not praying, of course) for a major rail accident which they can then use to justify stopping all the trains. They’ll also use it to further stop the pipeline pointing out the extreme dangers of this type of crude.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.