For investors, one of my best holdings ever was Burlington Northern (BNI). I was not happy when Warren Buffett bought it. That will turn out to be one of his best investments ever.
As more oil companies establish wells in the Bakken, railroads stand to transport more inbound carloads of frac sand, drilling pipe and other materials used to build wells or horizontally drill. And as more crude oil is extracted, the roads figure to transport lots of it to refineries and other end users thousands of miles away in the Gulf Coast, California, Oklahoma or points in Canada.
Rail transport is significantly cheaper than truck and more flexible than pipelines to move crude long distances, and an economical way to deliver inbound materials, so it's starting to become oil producers' mode of choice.
By 2011's end, about 1,800 new wells — each requiring 23 carloads of rail-delivered materials during construction — are projected to join the thousands already operating in the Bakken. At 2010's end, daily production had exceeded 300,000 barrels, outstripping available transportation capacity and hastening the need for more rail infrastructure.
yes! i wasn`t happy when he bought it couldnt believe BN sold out ,, so there is alot more to this story ,, that we dont know about,,
ReplyDeleteYou too, huh? A few years from now, Warren's successor may rename the company Burlington Berkshire. Ha.
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