CBR: The Tale Of Two Countries -- July 30, 2016

A couple days ago I posted a link to an article from The Wall Street Journal about the decline of CBR in the US. I made the comment that CBR was a solution for a problem that no longer existed.

Perhaps I spoke too soon, or perhaps it is simply a tale of two countries, but an alert reader noted this article in The [London] Globe and Mail: the death of the Keystone XL means record revival for Canadian railways. One wonders how much worse Canada's economy (May's GDP) would have contracted had it not been for the demise of the Keystone XL. From the linked article:

Keystone was the great hope for opening U.S. markets further to Canadian crude. Now that it’s dead, the railways are going to make not just a comeback, but transport more oil than ever before.

The Keystone XL pipeline was set to carry heavy Canadian crude south from Hardisty, Alberta’s oil hub, before being blocked by President Barack Obama last November, largely on environmental grounds. In a sign of what’s coming, exports by train rose 23 per cent in April, the biggest year-on-year jump since September 2014, according to Canada’s National Energy Board.

That’s just the beginning. Next year, with about a half dozen new projects and expansions in the oil sands, rail exports could double by the third quarter to a record, said Eric Peterson, research chief at Denver-based ARB Midstream LLC, an oil transport investor. That’s good news for USD Group LLC, Imperial Energy Corp. and Cenovus Energy Inc., all of which invested in new rail terminals or plan on expanding older ones this year.

“That production has to find an alternative source of take-away and that’s where rail comes in,” said Brad Sanders, chief commercial officer of USD Group, which plans to double capacity at its Hardisty terminal within 12 months to four trains a day, each of which could carry 65,000 barrels. “We expect from this point on that activity to grow.”

The capacity of existing pipelines is 4 million barrels a day, opening an opportunity for rail carriers. Crude output is expected to rise about 5 per cent to more than 4 million barrels a day in 2017, according to the Canadian Association of Petroleum Producers. Keystone XL would have augmented pipeline capacity by 830,000 barrels a day, an addition of more than 20 per cent.

“We are going to have to see some pretty significant volumes move by rail,” Peterson of ARB Midstream said by phone. “Every new incremental barrel of production that comes out of Canada will have to go by rail” once the pipelines are full, he said.

After two years of declines, rail transport rose to 109,000 barrels a day in April, a number that Peterson says will double by next year and could reach 450,000 by 2018.

Much, much more at the link.

So many story lines, least of which how killing the Keystone XL may have "saved" what little was left of the manufacturing economy in Canada when the price of oil plummeted.  

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The Apple Page

I knew it was "big." I did not know it was that big. From Market Watch:

The historic surge in Apple Inc.’s stock on Wednesday is finally giving investors something other than declining iPhone sales to talk about, and could confirm what Warren Buffett may have believed several months ago, that a bottom has already been seen.

The stock ran up 6.5% to close at a three-month high. The split-adjusted price gain of $6.28 was the second-biggest one-day rise in Apple’s history, in the wake of the technology giant’s better-than-expected quarterly results. It was just behind the biggest-ever gain of $7.10 on April 25, 2012. (A 7-for-1 stock split went into effect on June 9, 2014, meaning the actual April 25, 2012 price gain was really $49.72).

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The Conway Twitty Page

Don't Cry, Joni, Conway Twitty