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Railway chief says Keystone XL pipeline would cut freight revenues
Fuel Fix ^ | August 14, 2013 | Harry R. Weber

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.

That’s 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 BNSF’s 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 company’s 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.


TOPICS: News/Current Events; US: Montana; US: Nebraska; US: South Dakota
KEYWORDS: energy; keystonexl; oil; pipeline

1 posted on 08/14/2013 2:10:38 PM PDT by thackney
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To: thackney

Well, duh! Completing the railroad spur from Denver to Colorado Springs pretty much ruined the stage coach line which followed the same route.


2 posted on 08/14/2013 2:12:27 PM PDT by Vigilanteman (Obama: Fake black man. Fake Messiah. Fake American. How many fakes can you fit in one Zer0?)
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To: thackney

Owned by Obama BFF Warren Buffet, IIRC.


3 posted on 08/14/2013 2:13:24 PM PDT by 2ndDivisionVet (I aim to raise a million plus for Gov. Palin. What'll you do?.)
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To: thackney

NO! EVIL! OIL BURNS! FIRE BAD!!!


4 posted on 08/14/2013 2:14:26 PM PDT by null and void (Frequent terrorist attacks OR endless government snooping and oppression? We can have both!)
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To: Vigilanteman

And those pesky airlines have cut very deeply into coast-to-coast train revenues.


5 posted on 08/14/2013 2:14:48 PM PDT by TruthShallSetYouFree (July 4, 1776: Declaration of Independence. Nov 6, 2012: Declaration of Dependence. R.I.P. America.)
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To: thackney

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.


6 posted on 08/14/2013 2:14:56 PM PDT by marron
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To: thackney
Canadian tanker train crash raises fresh questions on oil transportation
7 posted on 08/14/2013 2:15:03 PM PDT by TexasCajun (Creepy-Ass Cracka -- Don't Call Me Cracker)
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To: thackney
This is obie's boy-pal Buffett's property Buffett's Railroad to Benefit from Obama Keystone Pipeline Rejection
8 posted on 08/14/2013 2:16:25 PM PDT by Sgt_Schultze (A half-truth is a complete lie)
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To: thackney

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.


9 posted on 08/14/2013 2:16:32 PM PDT by Publius (And so, night falls on civilization.)
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To: thackney

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.


10 posted on 08/14/2013 2:19:43 PM PDT by alloysteel (Unattended children will be given a Red Bull and a free Kazoo. Reminds me of Congress...)
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To: 2ndDivisionVet
Owned by Obama BFF Warren Buffet, IIRC.

Bingo. Big-O's denial has nothing to do with the en-vi-ron-ment and everything to do with cronyism.

11 posted on 08/14/2013 2:20:21 PM PDT by Da Bilge Troll (Defeatism is not a winning strategy!)
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To: thackney

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!!!!


12 posted on 08/14/2013 2:23:45 PM PDT by Secret Agent Man (Gone Galt; Not averse to Going Bronson.)
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To: 2ndDivisionVet

Didja see where the ONE refinery that got an ethanol blending exemption is [shockingly] affilitated with Goldman Sachs?

http://online.wsj.com/article/SB10001424127887324769704579010813339261246.html


13 posted on 08/14/2013 2:24:24 PM PDT by nascarnation (Democrats control the Presidency, Senate, and Media. It's an uphill climb....)
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To: 2ndDivisionVet

Ane he is a big liberal, isn’t he?


14 posted on 08/14/2013 2:26:53 PM PDT by Blood of Tyrants (Inside every liberal and WOD defender is a totalitarian screaming to get out.)
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To: thackney

Did he just say that rail is always the lower cost, except when compared with a pipeline, when it’s the higher cost?


15 posted on 08/14/2013 2:42:20 PM PDT by andyk (I have sworn...eternal hostility against every form of tyranny over the mind of man.)
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To: Secret Agent Man

In particular, look up “creative destruction”.


16 posted on 08/14/2013 2:45:03 PM PDT by USFRIENDINVICTORIA
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To: thackney

Follow the money.


17 posted on 08/14/2013 2:46:38 PM PDT by BenLurkin (This is not a statement of fact. It is either opinion or satire; or both.)
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To: USFRIENDINVICTORIA

just think “progress”.


18 posted on 08/14/2013 3:23:19 PM PDT by Secret Agent Man (Gone Galt; Not averse to Going Bronson.)
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To: thackney

now we are getting to the crux of the matter


19 posted on 08/14/2013 3:59:20 PM PDT by yldstrk (My heroes have always been cowboys)
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To: andyk

On the surface was his qualification. Pipelines that compete with rail are buried below the surface.


20 posted on 08/14/2013 5:33:18 PM PDT by thackney (life is fragile, handle with prayer)
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