Trains carrying more oil across US amid boom
Source: AP-Excite
By MATTHEW BROWN and JOSH FUNK
BILLINGS, Mont. (AP) - Energy companies behind the oil boom on the Northern Plains are increasingly turning to an industrial-age workhorse - the locomotive - to move their crude to refineries across the U.S., as plans for new pipelines stall and existing lines can't keep up with demand.
Delivering oil thousands of miles by rail from the heartland to refineries on the East, West and Gulf coasts costs more, but it can mean increased profits - up to $10 or more a barrel - because of higher oil prices on the coasts. That works out to about $700,000 per train.
The parade of mile-long trains carrying hazardous material out of North Dakota and Montana and across the country has experts and federal regulators concerned. Rail transport is less safe than pipelines, they say, and the proliferation of oil trains raises the risk of a major derailment and spill.
Since 2009, the number of train cars carrying crude hauled by major railroads has jumped from about 10,000 a year to a projected 200,000 in 2012. Much of that has been in the Northern Plains' Bakken crude patch, but companies say oil trains are rolling or will be soon from Texas, Colorado and western Canada.
FULL story at link.
Read more: http://apnews.excite.com/article/20121228/DA3EUA503.html
msongs
(67,420 posts)NickB79
(19,253 posts)All the industry info I've read has stated that it costs roughly $60-$75/barrel to extract and transport oil derived from shale formations through hydraulic fracturing. In comparison, oil produced from areas that still rely on conventional wells, like Russia and Saudi Arabia, can pump a barrel of oil for as little as $30. However, those cheap conventional oil reserves are pretty much all accounted for and actively being drilled already. Now that the cheap oil is gone, all we have left to exploit is the hard-to-get stuff like Bakken or the Alberta tar sands.
The boom in US oil production is just one of the many side-effects predicted by Peak Oil theorists years ago. As the price of oil stays elevated, it allows previously un-economical oil reserves to be tapped, and the US has MASSIVE unconventional oil reserves. This staves off the feared oil production shortfalls (for the time being), but only so long as the global economy will tolerate high oil prices.
It's really a tight corner we've painted ourselves into. Oil prices of $100/barrel are a serious drag on the economy, and help to push us towards another recession. However, if oil prices ever fell enough to make gas cheaper again (as in, much below $3/gallon), the shale oil wells would be shut due to being unprofitable and oil prices would spike, bringing with them expensive gas again.
As long as we insist on powering our civilization with polluting, non-renewable energy sources like oil, we're stuck in this downward spiral.
DollarBillHines
(1,922 posts)If cost of extraction and refinement were the paramount factors, diesel would be cheaper than regular unleaded.
Also, the Boosh people cut a hugely profitable deal with CSX.
NickB79
(19,253 posts)But I was specifically addressing the cost to extract oil from these particular formations. At $70/barrel to produce and get to market, that leaves only $20-$30 worth of speculation to play into the price.
And regarding diesel, remember that it's also about scale of economy here. There is a much higher demand for gasoline vs. diesel, so refineries tweak the process as much as possible to get more gasoline vs. diesel from a barrel of oil. They can then legitimately say the higher diesel prices are due in part to limited supply despite the fact that they themselves are the ones that caused the reduction.
4dsc
(5,787 posts)we import about 9 million barrels per day and export about 1 million barrels of refined oil products.
That and speculation add to the cost of our gas prices.
allan01
(1,950 posts)im a railfan and have noted that as well.
DollarBillHines
(1,922 posts)from Wiki:
The founding chairman was Prime F. Osborn III of Seaboard and the first CEO and second chairman was Hays T. Watkins Jr. of Chessie. Watkins was succeeded by John W. Snow as CEO in 1989 and as chairman in 1991. When Snow left the company in 2003 to become United States Secretary of the Treasury, Ward, who then headed CSX Transportation, was promoted to succeed him.
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(scratches head...)
Odin2005
(53,521 posts)I waited 8 MINUTES! All the while I worried what would happen if they blew up.
Rosa Luxemburg
(28,627 posts)FrodosPet
(5,169 posts)Solar is only good during the daytime, and wind is only good when and where the wind is blowing.
Pure electric vehicles have limited range and the materials needed to make efficient batteries and electric motors will soon become harder to obtain. And we are going to have to deal with Afghanistan and China to get them.
Not to mention the need for more long distance power lines to get the juice from where it can be efficiently produced to where it is needed.
And how many more huge, highly polluting copper and rare earth mines will need to be dug?
I'm not a supporter of oil, far from it. I'm just trying to keep it real. As much as we want to believe otherwise, it's not easy peasy here comes the sunpower.