Friday, September 7, 2012

Delta, Bakken, and a Refinery

Here's that story about Delta Airlines bringing Bakken oil to its "new" refinery. I had read that Delta was "thinking" about this, but I had not seen the story.

A reader sent me the story. Thank you.

Link here the mobile edition of the Philadelphia Inquirer. This is another incredible story on so many levels. Remember: the Trainer refinery had been slated for closure. A lot of things came together, including Bakken oil to save this refinery, and to save a few jobs.
Who knew that the economic solution for the region's beleaguered oil refineries would arrive on a slow train from North Dakota?  
Delta Air Lines, the new owner of the Trainer refinery that is scheduled to reopen later this month, on Thursday became the third fuel producer in the Philadelphia area to announce plans to bring in crude oil by rail from the Bakken oil field in the upper Midwest. Edward Bastian, the airline's president, told an investor conference in New York that Delta plans to replace some imported oil at Trainer with domestic crude brought in by rail.  
The cheaper North Dakota crude could enhance the airline's plans to produce its own jet fuel, Bastian said. "It's very early to draw any conclusions, but this could lead to even larger savings," the airline executive told the Deutsche Bank Aviation and Transportation Conference.  
Delta is counting on its subsidiary, Monroe Energy L.L.C., to generate at least $300 million a year in savings by refining 80 percent of the airline's domestic fuel needs. Delta joins a fast-growing queue of refiners who are building unloading facilities and securing rail cars to tie into the North Dakota shale-oil boom, where producers are employing the same hydraulic fracturing method used to extract natural gas from Pennsylvania's Marcellus Shale.
Go to the link for so much more.

2 comments:

  1. I caught this too, the other day. Very interesting news, and I think we might see more of this in the future. Might be a good way to encourage consumption of domestic oil. The discount for Bakken oil seems to be declining as infrastructure improves, but foreign oil prices ought to increase too, due to higher shipping costs as oil increases in price as well. Interesting.

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