Skip to comments.Railway chief says Keystone XL pipeline would cut freight revenues
Posted on 08/14/2013 2:10:38 PM PDT by thackney
Allowing the Keystone XL pipeline to move forward would cut into the revenue of rail freight operators that transport oil and other liquids, but there would still be plenty of growth opportunities for cost-conscious operators, BNSF Railway CEO Matthew Rose said Wednesday.
Rose told a lunch gathering at the annual Summer North America Prospect Expo at the George R. Brown Convention Center in Houston that pipelines present increasing competition to his company and his peers.
We know that rail on the surface is without a doubt the most efficient and lowest price, but we know that when we compete with the pipelines, we are the higher cost, Rose said.
Thats one reason, he said, BNSF is looking to use liquefied natural gas to fuel some rail cars as part of a cost-cutting effort to make transporting freight by rail more attractive to oil producers and refiners.
Crude currently makes up about 4 percent of BNSFs freight volume. But even with competition, that is expected to grow to 7 percent or 8 percent over the long-term, Rose said. The growth of shale plays is a major reason for that, he said, and BNSF is making the investments to handle that load.
The company has 17 origin facilities serving Western shale plays.
We are anticipating more growth, making sure we are prepared to handle it, Rose said.
Rose said rail offers distribution flexibility for producers and refiners. That makes the ups and downs of the energy industry a key focus for BNSF.
Fuel is now about 30 percent of the companys costs, as BNSF burns 1.4 billion barrels of oil a year. At the same time, it hauls 600,000 barrels of oil per day and that is expected to increase to 800,000 barrels per day by the end of the year, Rose said.
At BNSF, we put oil into two buckets, the oil that we burn and the oil that we haul, he said.
Fort Worth-based BNSF Railway operates more than 1,000 trains a day on one of the largest freight rail transportation networks in North America.
Well, duh! Completing the railroad spur from Denver to Colorado Springs pretty much ruined the stage coach line which followed the same route.
Owned by Obama BFF Warren Buffet, IIRC.
NO! EVIL! OIL BURNS! FIRE BAD!!!
And those pesky airlines have cut very deeply into coast-to-coast train revenues.
I remember watching a series recently about the 19th century industrialists... and the first pipelines built in order to break the power of the railroad companies. It was interesting.
And so Jim Taggart got the National Alliance of Railroads to stop the pipeline — and the passage of oil on Dan Conway’s Phoenix-Durango Railroad — to make sure that Taggart Transcontinental got to carry all that oil.
It’s probably a good thing that BNSF Railway isn’t still using coal-fired steam engines.
They are STILL stuck in the Twentieth Century.
In terms of overall efficiency and allocation of resources, a well designed and properly maintained pipeline has it all over any railway ever built. Pipelines are wholesale transportation, railroads are more suited to short runs and smaller deliveries.
Bingo. Big-O's denial has nothing to do with the en-vi-ron-ment and everything to do with cronyism.
so what. rails aren’t guaranteed protected income forever. that’s called capitalism. look for new clients. crap.
what whiny morons we have nowadays. but it’ll cut into my business! well crap, ADAPT!!!!
Didja see where the ONE refinery that got an ethanol blending exemption is [shockingly] affilitated with Goldman Sachs?
Ane he is a big liberal, isn’t he?
Did he just say that rail is always the lower cost, except when compared with a pipeline, when it’s the higher cost?
In particular, look up “creative destruction”.
Follow the money.
just think “progress”.
now we are getting to the crux of the matter
On the surface was his qualification. Pipelines that compete with rail are buried below the surface.