Railroads confident they'll keep winning a slice of crude oil-moving business

[Omaha Steve]

http://www.omaha.com/article/20130816/MONEY/130819319/1685#railroads-confident-they-ll-keep-winning-a-slice-of-crude-oil-moving-business

By Emily Nohr

Domestic oil production is on the rise, creating an opportunity, as well as some controversy, for railroads.

Last month's fiery derailment in Quebec of a trainload of crude, which killed 47 people, renewed safety concerns about moving oil by rail. Rail industry officials say rail continues to be a safe method and offers advantages that will keep railroads in the crude-hauling business long term.

The resurgence of U.S. oil — production peaked at 9.6 million barrels a day in 1970, then fell to 5 million in 2008, growing back to nearly 6.5 million in 2012 and 7.3 million in May of this year — has created a demand for more ways to haul crude to refineries, where it's transformed into products consumers use, such as gasoline, diesel fuel and kerosene.

Omaha-based Union Pacific saw its first-quarter chemicals business rise 14 percent, with $873 million in revenue, and of that crude oil volume was up 107 percent. In the second quarter, the chemicals business was up 12 percent, with $890 million in revenue and crude oil volume up 39 percent.

FULL story at link.

[madrchsod]

1. with up`s coal business going away oil would be a the replacement

there`s a pipe to the chicago refineries and oil by rail would be another source.