2012: The Year Of The Tank Car

This is an old article, published back in February, but I ran across it looking for something else. It's a nice article on CBR. 

The Oil and Gas Financial Journal is reporting:

The US energy midstream sector will remember 2012 as the “Year of the Tank Car.” Venerable pipeline companies were reduced to investing in rail terminals. Although reluctant at first, coastal refiners embraced the margin boost that crude by rail provides them. Producers signed up to move landlocked crudes by rail to coastal destinations in search of higher prices. Petroleum shipments increased 46% from 370 M carloads in 2011 to 540 M carloads in 2012. Rail car manufacturers struggled to meet an order book of 40,000 rail cars and the backlog for new delivery is 18 months.

Today we begin a crude by rail series.

We discussed the crude by rail “phenom” all through last year as the development gathered steam. A lot of our analysis was centered on the region that saw most rail loading terminal development – North Dakota (see From a Famine of Pipeline to a Feast of Rail and our earlier blog on rail shipments to the East Coast -  Rail it on Over to Albany). By August of last year the Bakken rail terminals coming online had started to have an impact on crude pricing in the region as rail became the preferred form of transport out of the Bakken (see Railing Against the Pipelines). We delved into the tank car business and the railroads in the context of natural gas liquids (see A Tank Car Train for Hire). In December we looked at the crude by rail destination terminals owned by Plains and Nustar at St. James, LA (see Back to the Delta). In this series we will cover crude by rail “soup to nuts” including loading terminals, destination terminals and transport economics.  In this introduction we review the expansion of crude by rail during 2012 and the market trends that lie behind the Year of the Tank Car.

A great, great article for the archives.