With U.S. crude oil producing at record amounts and outstripping pipeline capacity, the country is relying heavily on railroads to move new crude oil to refineries and storage centers, reported the U.S. Energy Information Administration (EIA) Wednesday.
The total amount of crude oil and refined products being transported by rail is close to 356,000 carloads during the first half of 2013, up 48 percent from the same period last year, according to Association of American Railroads.
“U.S. weekly car loadings of crude oil and petroleum products averaged nearly 13,700 rail tankers during the January to June 2013 period. With one rail carload holding about 700 barrels, the amount of crude oil and petroleum products shipped by rail was equal to 1.37 million barrels per day during the first half of 2013, up from 927,000 barrels per day during the first six months of last year. Crude oil accounted for about half of the 2013 daily volumes," reported AAR.CNNMoney:
With U.S. oil production booming and pipelines operating at full capacity, the amount of oil shipped by rail car surged in the first six months of the year -- jumping 48%. And in light of rail's growing importance in bringing oil to market -- and the derailment and explosion of a train carrying oil in Canada earlier this week that killed at least 24 people -- the focus is now on safety.
The rapid rise in rail oil transport is directly related the boom in U.S. oil production from places such as North Dakota's Bakken Shale and Texas' Eagle Ford. Most of the rail shipments are believed to originate in North Dakota. They are usually bound for refineries along the Gulf Coast or the east coasts of the United States and Canada.