Crude Moves Steadily on Trains, Boats and Trucks

More U.S. oil is transported throughout the country via truck, barge and train than at any point since 1981.

August 27, 2013

NEW YORK – The amount of crude oil being transported throughout the United States on trucks, barges and trains has reached its highest point than at any time since the government began keeping records in 1981, “as the energy industry devises ways to get around a pipeline-capacity shortage to take petroleum from new wells to refineries,” reports the Wall Street Journal.

While this approach is creating opportunities for transportation companies, it may also be “a precursor to what may be a larger change,” writes the news source: “the construction of more than $40 billion in oil pipelines now under way or planned for the next few years.”

"We are in effect re-plumbing the country," said Curt Anastasio, CEO of San Antonio-based NuStar Energy LP, adding that oil is "flowing in different directions and from new places."

The current pipeline system, writes the news source, has become “ill-quipped” to support increased oil production in states such as Texas and North Dakota as well as Alberta in Canada.

"All of the pipes are pointed in the wrong direction," Harold York, an oil researcher at Wood Mackenzie, told the news source, adding, "We are turning the last 70 years of oil-industry history in North America on its head, and we are turning it on its head in the next 10 to 15 years."

And without new pipelines, companies are relying on trucks, trains and barges to move crude. According to the U.S. Energy Information Administration, oil delivered to refineries by trucks grew 38% from 2011 to 2012, while crude on barges grew 53% and rail deliveries quadrupled. “Although alternatives are growing rapidly, pipelines and oceangoing tankers remain the primary method for delivering crude to refineries,” writes the news source.

Meanwhile, the American Association of Railroads, which is already well versed in handling hazardous cargo, is prepared for growing crude shipments. In 2008, major U.S. railroads carried 9,500 carloads of crude, according to the association, and are on pace this year to carry 389,000.

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