Barges, Pipelines, Truck, And Rail

Regular readers of the blog know this story well through the wonderful posts by RBN Energy, now being reported in The Wall Street Journal: crude oil shipments by sea and inland waterways rise to supplement rail, pipelines. The oil boom is raising barge operators' fortunes. It's just a matter of time before we hear of more mishaps in the channels, especially as barges hit bridges.

The rising tide of North American oil is lifting a lot of barges, as energy companies increasingly turn to rivers and coastal waterways to get U.S. and Canadian crude to refineries.

Oil floating on barges from the Midwest down the Mississippi River to the Gulf of Mexico coast, for example, is up 13-fold since 2010, as companies find alternate routes where pipelines don't exist or have sufficient capacity. Nearly five million barrels of crude a month is being sent by barge south after companies pump it from North Dakota's Bakken Shale and, increasingly, Canada's oil sands, according to federal data.

Barge operators such as Houston-based Kirby Corp., which is the biggest by fleet size, are generating healthy profits. The company last week reported a record profit, $64.3 million, for the fourth quarter, on revenue of $568.4 million. Kirby is spending $90 million this year to add 37 inland barges to its fleet and another that can travel on the open sea. Kirby's stock shot up more than 58% last year.

I think the bigger story is this: the US mining and manufacturing sectors are back. Everyone is benefiting: trucking, pipeline operators, rail, barges.

I found it interesting that "North Dakota Bakken Shale" was mentioned and not the Texas Eagle Ford Shale.