I always thought "we" were ahead of the game. I looked forward to a bit of slack in takeaway capacity as Bakken oil production (or at least the pace of growth) slowed due to the slump in oil prices.
So, I was surprised when I read this Bakken.com story that said the slump in oil prices is not likely to result in a gain for grain shippers:
A decline in Bakken oil trains isn’t likely to spell good things for Montana grain farmers, according to rail observers.
Getting grain on trains has been a struggle for Montana’s $1.5 billion wheat economy for more than a year, during which time critics have faulted Burlington Northern Sante Fe for leaving grain at the station while hauling more than a half-million barrels of oil daily.
Now oil production seems poised to decline. The number of active drilling rigs in North Dakota has fallen by 14 in the last three weeks, according to the Bismarck Tribune. The price per barrel for oil hit a five-year low Monday.
A slowdown isn’t likely to free up the rails for grain, analyst Terry Whiteside told farmers gathered Tuesday in Billings.
“You would think it would,” Whiteside said. “However, they are telling me in Wyoming they have not found as much oil through horizontal drilling as they have in the Bakken, and that’s probably all going to go westbound. I don’t see it lightening up very much, and then if coal comes on. We’ve just got a very tight capacity problem for a while.”On top of this, remember: new restrictions on shipping oil by rail. And still it continues.
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