Crude-By-Rail Story -- Globe and Mail

Updates

Later, 12:00 noon: what did I say about need for more maintenance? A reader just sent in this link. BSNF to hire more maintenance workers; more CAPEX for maintenance. "Rail-ready jobs," Mr President.

Original Post

This is a great story from the Globe and Mail, a story sent in by a reader. Thank you. A great story.

Go to the link for the whole story, but this paragraph caught my eye:

Take Crescent Point. It has built its own facility to load rail cars and, in spring, was shipping 8,000 barrels a day by train. By summer, “we should be up to 15,000 to 16,000 barrels per day,” or a fifth of its oil, said Trent Stangl, Crescent Point’s vice-president of marketing and investor relations. The markets the company is accessing by rail are paying so much more for the oil that Crescent Point expects to pay off the loading facility in under a year. 

They will pay for the loading facility in under a year. Repeat: in under a year.  Without tax incentives.

Remember:

a) the industry can't build tank cars fast enough
b) the rails were not meant to handle this much traffic; there will be need for more tracks and lot more maintenance

Investors might want to re-read the last two bullets.

Disclaimer: this is not an investment site.