Then this morning, Don sends me the following Reuters story, about how that very subject:
Rail shipments of crude from the landlocked and oversupplied Midwest to refiners in the Gulf Coast appear set to surge next year, to nearly double the volume now flowing in congested pipelines between the regions.This was also interesting:
The shipments, which were rare until this year, have already grown to around 100,000 barrels per day (bpd) in recent months, industry sources told Reuters. Two rail terminals in St. James, Louisiana are receiving much of the crude, while other sites like Houston are taking additional crude.
The daily cargoes between the Midwest (PADD 2) and the Gulf Coast (PADD 3) could triple to 300,000 bpd by late 2012, industry sources said. Logistics firms unveiled plans for several new crude-by-rail terminals over the last four months.
Since the Department of Energy does not track crude-by-rail, there's no official data on how much is moving.The government tracks everything else, I was surprised that it does not track oil shipments by rail. Be that as it may, I started posting about crude-by-rail about six months ago, I suppose. I don't have a good quantitative mind, but when one spends a lot of time in the Bakken, and even more time thinking about it, one starts to pick up on trends.
Warren Buffett is either very, very smart, or very, very lucky (I assume a 30/70 split) -- I am thinking of of his purchase of Burlington Northern Santa Fe (BNI) in 2010. But one has to remember, the sage of Omaha was probably stopped at BNI rail crossings all his life growing up in Nebraska. He had lots of time to think about the potentials of rail.
If Warren Buffett does come out ahead with his purchase of Burlington Northern Santa Fe (BNI) in 2010 it will be an example of what I have come to term "smart luck".
ReplyDelete"Smart luck" is where you do the correct thing and the pieces fall into place and things work out. As a personal example, I long ago sought work with the Postal Service and (wired) phone company. It seemed like a good idea in the 1970's. Had I chosen these as careers it would have been "smart" but outside forces would make them bad now.
As for Buffet buying the railroad, train will be the backbone of North American transportation for the foreseeable future. It's pure physics of overland transport. That said, during the 1930's Great Depression railroads were operating at under 50% capacity with lots of surplus rolling stock (engineering departments for new steam locomotives shut down in the early 1930's because they already surplus locomotives, deja vue with Boeing after the 1973 oil crisis.
How else could a man move this billions and keep the carbon down...
ReplyDeleteWhy is not the Buffett Burlington relief train heading to New England to provide aid and assistance?
On a serious note, I was surprised (eek) that shipping goo via rail only added one to two dollars more per barrel...
I think Warren Buffett is going to do very, very well with his railroad.
ReplyDeleteThe price differential between crude-by-rail and crude-by-pipeline used to be substantial, but with efficiencies, particularly the unit train (110 tankers), the differential is narrowing.
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