Memo to Self: File Under "In Case You Haven't Heard..." And Again, It's All About The Bakken

Rigzone is reporting that rail will be key play in crude oil transportation:

While America has gone through an energy transformation, so have railways, thanks to shale production growing faster than available pipeline space. Although rail is typically more costly than pipelines, railcars are able to reach markets that pipelines don't, particularly North Dakota's Bakken formation, yielding higher prices for producers. [At Clearbrook, Bakken is selling at a premium to WTI. This is a dynamic link; it will change daily.]

This trend is not temporary. Small amounts of crude have long been transported by rail, but since 2009, the increased movements have been significant. U.S. railways have seen a boost in transportation of crude oil and petroleum products in the first half of 2012 by about 38 percent, compared to the same period in 2011, according to the U.S. Energy Information Administration.

"Rail is the new player in the infrastructure expo for oil. Five years ago nobody was talking about rail infrastructure," said IHS' Vice President of Upstream Research Andrew Slaugher at the recent IHS CERAWeek conference.

Rail deliveries of crude oil and petroleum products in June 2012 jumped 51 percent to 42,000 tanker cars from a year earlier to an average weekly record high of 10,500 tanker cars for that same month.

Furthermore, North Dakota produced 747,000 barrels a day in October 2012, up 50 percent from 2011, and an estimated 52 percent of the crude moved was by rail, versus 38 percent by pipeline, according to the North Dakota Pipeline Authority.

Again, all about the Bakken. 

I still remember "anonymous" some months ago opining that rail was a temporary phenomenon. Maybe.