Long, Long Article On BNSF In Montana -- September 28, 2015

This is a must-read, must-bookmark article. Often these articles disappear over time. The Billings Gazette has a long, long story on BNSF, CBR, and the agricultural, coal, and automobile shipping backlog.

Some data points:

BNSF is spending $160 million in Montana this year to expand rail capacity, and is also hiring 450 people in the state. The swelling workforce shows in Forsyth, where outside Fransen’s depot office, the company parking lot is full and the pay is well above average for the area. Starting pay for BNSF conductors is $60,000 a year after 13 weeks of training. The only prerequisite is a high school diploma. It doesn’t take too many workers with that size salary to stimulate the economy of a small town like Terry where rail construction is underway.

And this:

That’s a lot of investors with wagers on BNSF’s iron horse to not only show, but win. No community has more on the line than Shelby, which launched its rail industrial park a few years ago after turbines for North Central Montana’s wind farms began rolling into town. Shelby gets 45 to 55 trains a day, according to Mayor Larry Bonderud. The mayor would like to see the number of trains increase to 65, where it was before the Great Recession.

“We’re seeing more agriculture commodities, more value-added ag commodities,” Bonderud said. “We’re seeing coal come up from the south and being interchanged to the Canadian Pacific,” which crossed the border and picks up loads in Shelby.

Bonderud said you could see the rail traffic picking up if you knew what to look for. Not only because oil tankers and grain cars were rolling down the track, but also because recession-idled shipping container cars began leaving the seldom-used side tracks across Montana, which were lousy with the specialty cars used to move shipping containers between Chicago and the West Coast.

Bonderud said BNSF is making the necessary track improvements, none bigger than a 60-mile double-track stretch between Glasgow and Minot, ND, that allows incoming and outgoing oil and agriculture trains to travel more freely.

Remember that Dickinson Press story telling us that more CBR would result in longer waits at railway crossings? Here, we are told that prior to the Great Recession as many as 65 trains a day rolled through the northern tier. Now, it's only 45 to 55 trains a day. Something tells me ....

Imagine how bad this would all be if there was no "war on coal."

It's a long, long article. Many, many story lines. 

Regular readers know that I have the highest respect for BNSF and anyone "blaming" BNSF for these problems either has an agenda, or doesn't understand the business.

And it's the folks in Minnesota, Iowa, and Nebraska, farm states as far I know, that still favor CBR over oil pipelines -- having killed the Keystone and looking to kill the Sandpiper.

The last chokepoint for BNSF across the northern tier is a small river in Idaho. The small town located near the river doesn't want BNSF to put in a second bridge to complete the double-track project across the northern tier (previously reported). They cite ... environmental concerns.

Crockett's Theme, Jan Hammer

I see Europe won its third straight Ryder Cup. Did anyone even watch? I see that Jeff Gordon won at Dover today. "Chase for the Sprint Cup" (from wiki):

Under the new system (2014), the Chase field is expanded to 16 drivers. But unlike previous versions of the Chase, drivers are eliminated from title contention as the Chase progresses.

The bottom four of the top-16 drivers are eliminated from title contention after the third race (Dover) in what is called the "Challenger Round", as points are reset to 3,000 points. [That's what happened today.]

Then the new bottom four are eliminated after the sixth Chase race (Talladega) in the "Contender Round," while the points all reset to 4,000. The "Eliminator Round" involves axing the drivers 5th-8th in the points after the penultimate race at Phoenix, and the top four drivers have their point totals reset to 5,000 so that they are tied for the final race at Homestead-Miami for the title run.

Of these four drivers, the driver with the best finish at Homestead is then the crowned series champion.

CBR And Other Rail-Related Stories -- September 25, 2014; Don't Whine For Me, Mr Bakken

Updates

September 27, 2014: another story to add to the list of those whining about CBR but not demanding more pipeline. The Dickinson Press is reporting:

Runaway oil production could slow road traffic as drivers face longer delays to cross train tracks in many congested regions, a U.S. study released on Friday predicted.

Oil, coal and grain shipments are taxing the national rail grid as the deliveries of those commodities are expected to climb along with commercial shipments in the coming years, according to the report from the Government Accountability Office, an investigative arm of Congress.

Freight movements on the tracks are due to rise 51 percent over 2007 levels by 2040, according to the Transportation Department, and so exceed 28 billion tons per year.
One factor is oil train deliveries out of North Dakota’s energy patch that neared 250,000 carloads in 2012 compared with roughly 10,000 in 2007, according to the study.

The increased oil shipments will translate into tie-ups at highway-rail crossings, though the study said it was hard to judge what areas of the country would be most affected.

As soon as I saw "runaway" -- which, by the way, was the first word in the story -- I knew it would be another "whining" story. Note also the dateline of the story (Washington, DC): this was no doubt sent out by some "advocacy group" disguising the "press release" as a story.

"... it was hard to judge what areas of the country would be most affected." Well, one could start with the northern tier, Minnesota to Washington State, and then go from there. I can't make this stuff up.

Original Post

Marketplace is reporting:

The electric utility that serves the Duluth region is mothballing four coal-powered generators, and not because the Environmental Protection Agency told it to.

No, Minnesota Power is idling these generators for three months because the railroad isn’t delivering enough coal. Railroads are crazy busy— carrying oil from North Dakota for one thing— and the delays are driving their customers nuts. 

Al Rudeck is the vice president of strategy and planning for Minnesota Power. The Burlington Northern Santa Fe railroad has delivered the utility’s coal for decades. I asked him: Has this kind of thing happened before?

"This is unprecedented," he said. "We’ve never had to shut our units off because we can’t get the coal we need. This year they’ve had a lot of challenges on the rail system, in terms of congestion, weather, and a lot of business."

Railroads have also had a lot of unhappy customers.

Farmers can’t get a bumper crop to market.

On some days, according to the Alliance of Automobile Manufacturers, car-makers have had as many as 200,000 vehicles sitting outside factories, waiting to be picked up by trains. 

That's interesting about the auto-makers. I posted that same prediction some time ago; this is the first time I've seen the "predication" "validated." Don't whine for me:

Don't Cry For Me, Argentina; Evita, Madonna
Don't cry for me, Minnesota. The Minnesota and Iowa farmers have pretty much decided they prefer CBR instead of crude oil pipelines. The Dickinson Press is reporting the Minnesota PUC took the unusual step to further complicate any movement on this issue:

An official of the union representing workers who hope to help build an oil pipeline through northern Minnesota is raising alarms over regulatory delays.

David Barnett, a special representative to the United Association of Journeymen and Apprentices of the Plumbing and Pipe-Fitting Industry, said Wednesday a recent decision by a Minnesota regulatory board to look into alternate routes could put Enbridge’s Sandpiper pipeline in jeopardy.

The Minnesota Public Utilities Commission voted earlier this month to study the environmental implications of six system alternatives for the pipeline, which would carry Bakken crude oil from western North Dakota to Clearbrook, MN, and then Superior, WI.

“We want it to be the best environmental route for the state of Minnesota,” Barnett said.

“But we don’t think that this course of action is geared at finding the best environmental route.”

The PUC also separated the Certificate of Need application from the route-permitting process, which are typically considered jointly.

Enbridge spokeswoman Lorraine Little stopped short of saying the $2.6 billion project was at risk, but said the company expects it to be delayed.

********************************

A contributor to another board had some positive news with regard to BNSF efforts to relieve the logjam and shortage of coal reaching those Minnesota power plants:

Deliveries will be increasing shortly in my opinion.  I live along the Burlington Northern southern mainline in Montana and ride my bicycle along a couple hundred miles of their routes. 

BNSF started new sidings in 4 locations between Fallon, MT, and Forsyth, MT (80 highway miles), and have completed 3 for sure now.  

In addition, BNSF has installed new routing gear at Terry, MT, to remotely switch trains at 40 mph from the west to either: a) the old Milwaukee tracks heading east through southern North Dakota; or, b) northeast into northwest North Dakota and the Bakken-Three Forks shale developments.

There were large numbers of brand new Cat/Deere excavators, scrapers, etc at each of those sites.  

Then last week end I took the Amtrak train east from Wolf Point, MT, to Minot, ND.  In one spot I saw 2 brand new Cat backhoes -- I no longer know the numbers but they would have been about 225's when I used them a lot and 5 comparable Deere backhoes -- not a scratch on them.  

The Amtrak schedule has been lengthened to give more time to get through the construction areas plus Amtrak warns of up to 6 hour delays.  My train managed to make up enough time for the extended schedule coming in less than an hour late each way.  

From Williston east, there is now double track most of the way.   And Amtrak is rerouted away from Rugby and Grand Forks as those tracks are in the process of being upgraded -- I suspect those would go into Duluth.  

Last year the mines in Colstrip on the southern route were not even willing to price low enough to get any business.  The tracks which carried coal north from Colstrip mines to Forsyth and the main BNSF track sat idle with excess coal cars piled up on that single line.  Trainloads of coal did come through Forsyth, Miles City, Terry, but not as many as we are used to.   

I strongly suspect BNSF will be capable of carrying at least twice the freight on the two routes which was carried in past years in just a few more weeks.  

We don't see nearly as much oil going west as coal going east, but with longer sidings, they should be able to move trains much more effectively.   

Capitalism works wonders--it just takes a bit of time.

Biggest Story Of The Year For The Bakken? September 10, 2014; KOG, Whiting Report Several Big Wells; Nineteen (19) New Permits

Updates

Later, 6:41 p.m. CDT: see comments below. I mentioned this project a year ago in an earlier post. I had completely forgotten about it. I'm surprised no one wrote and asked for an update on this project. I have visited the Bakken three (or maybe four) times since September, 2013, and I have driven past that location every time, multiple times with my dad and never mentioned it to him, which means I had completely forgotten about it.

Original Post

This might be the biggest story of the year (so far): huge rail terminal to be built east of Williston. A reader sent the link. Thank you. The Bakken.com is reporting:

New Frontier LLC, a Williston, N.D.-based developer has announced plans for a $250 million transload facility called the East Valley Rail Project. Jason Everett, lead developer for the company, announced the project at the recently held Williston Economic Development Summit. Once complete, the facility will provide inbound storage and handling of several energy related products, ranging from frack sand to tubular goods.

The new facility, to be located east of Williston, will help centralize the oil activity in one location, says the company. The terminal will be located just east of the Halliburton-Sanjel complex east of Williston, just east of the 1804 Little Muddy Bridge, near the old salt mine.

“We looked at the location and determined that the rail only crosses the highway at four different spots between Montana and Minot, this [Williston] being one of the main areas that it crosses a major public road,” said Everett.

This project will be the first rail facility with public water and sewer and all utilities available to it. And according to Everett, designing the facility to be large enough to take on multiple tenants and with having most of the oil companies and oil field service companies having their main headquarters for the Bakken in Williston makes it “the opportune spot to be the logistical advantage from their home-base.”

The facility will be able to store about 160,000 tons of frack sand, will have a pipe and casing yard of about 30 acres, and will have an extra 90 additional acres of storage for things like large tanks or rail car storage.

I can't remember if I posted this or not, but I sent e-mail to another reader a few days ago: wit the problem they are having getting fracking sand to the Bakken, my hunch is we are going to see increased sand shipped during the relatively slower periods in the winter and then stored locally. This certainly looks what we might be seeing here.

More from the article:

This facility is the first unit train facility in western North Dakota approved by the BNSF, which allows them to land a full train and once those cars are needed, the facility will be able to switch cars internally verses waiting for the railroad to switch them.

“Right now, if you have 40 cars and can only get five cars switched per day, it takes eight days to unload them, but we’ll be able to do all of the 40 cars in about seven hours,” said Everett.

Eastern Valley Rail will be able to hold 18 to 20 tenants and Everett said they’ve already begun selecting clients for the facility.

Much more at the linked article including Google satellite map.

How fast could we see this? The company hopes to break ground this fall, and have first shipments by March, 2015 -- that's only about 7 months from now. And much of that construction during the legendary, frigid, North Dakota winter.

Daily Operations Report

Wells coming off the confidential list Thursday:

• 27578, drl, BR, Sequoia 31-4TFH, Hawkeye, no production data,
• 27618, drl, Slawson, Whirlwind 3-31H, Big Bend, producing,

Wells coming off the confidential list today were posted earlier; see sidebar at the right.

Nineteen (19) new permits --

• Operators: CLR (6), MRO (5), Hess (4), QEP (3), Whiting
• Fields: Avoca (Williams), Brooklyn (Williams), Big Stick (Billings), Grail (McKenzie), Baskin (Mountrail), Bailey (Dunn)
• Comments:

Five (5) producing wells completed:

• 26763, 2,125, KOG, P Irgens 155-99-2-4-9-14H, Epping, t8/14; cum --
• 26765, 1,903, KOG, P Irgens 155-99-2-4-9-15H3A, Epping, t8/14; cum -- 
• 26767, 1,398, KOG, P Irgens 155-99-2-4-9-15H3, Epping, t8/14; cum --
• 28035, 1,199, Whiting, Ness 41-21-3XH, Sanish, t8/14; cum --
• 28343, 1,414, Whiting, Perry State 11-25-2H, Sanish, t8/14; cum -- 

Active rigs:

	9/10/2014	09/10/2013	09/10/2012	09/10/2011	09/10/2010
Active Rigs	199	184	192	199	141

Excellent Story At The Bismarck Tribune On BNSF Efforts To Improve Service

The Bismarck Tribune is reporting, from Ross, North Dakota:

If that weren’t enough for a town with dirt streets that are rutted and ragged — partly because oil workers have swelled the population from 50 people to 600 — the railroad is laying new track alongside town.

The project is its most ambitious expansion here since the days when the railroad was built with steam shovels and men swinging pick axes.
A second, side-by-side track will double BNSF’s capacity between Minot and Glendive, Mont., and hopefully unclog congestion, at least through the Bakken.

The railway’s been under some pressure to get better service to elevators to move grain out and fertilizer in. It reported this month that it was still running an average of 26 days late.

It’s investing $620 million along the northern corridor route to improve that schedule. Sections of the new track will be usable this year and all of it will be by next year, said BNSF spokeswoman Amy Mcbeth.

Overall, BNSF invested $4 billion in expansion and maintenance last year and $5 billion this year, exceeding any historical investments in the industry by any railroad, she said.

Burlington Northern Update -- Staggering

Background

BNI

BR

Think: a) huge shipping volumes; b) mainline along US Highway 2; c) natural gas processing and refueling station at the Minot BNSF yard; d) a petrochemical plant in Minot because BNSF is there to transport finished products. 

Updates

June 7, 2013: if the BNSF natural gas test is a success, it would be very interesting to see if BNSF might locate a natural gas processing plant at the Minot yard for refueling. It's very possible BNSF could become a much bigger entity in North Dakota before this is all over. So much of this is dependent on an adequate work force, and as jobs become available, fewer young people will leave the state for greener pastures elsewhere.

June 7, 2013: there is talk that Burlington Northern will upgrade its track along US-2 (Williston - Minot - Fargo - Minneapolis - Chicago) to a mainline track. Personal communication. No link.

However, this story in ConstructionEquipmentGuide provides some interesting data points, dated December 22, 2013:

An increase in growth and traffic numbers in Minot, N.D., have made it necessary to create a bypass on the northeast corner of the city starting at County Road 12, just north of Highway 2, an east/west route, and continuing to U.S. Highway 83, a main thoroughfare and north/south route.

The project also includes the construction of an overpass over the Burlington Northern Santa Fe Railroad tracks on Highway 55 between Highway 2 and County Road 12, on the south end of the project.

The project was developed five years ago with the intention to keep major traffic out of the downtown area, said Jeff McElwain, project engineer of Ackerman-Eastvold Engineering, the project coordinator.

Original Post

I grew up with Burlington Northern. I remember "racing" my car through the rail yards / grain elevators on the south side of Williston, to evade ... whatever needed evading.... but that was long ago, in a faraway place ... but I grew up with Burlington Northern ... Great Northern before that... and it was one of the first companies I invested in when I first started buying shares in individual companies back in 1984 .... I'm glad to see BNSF continues to put out press releases.

Don sent me two.

First:

BNSF Railway's economic development team worked with customers and state and local economic development organizations to locate hundreds of new or expanded facilities in communities across BNSF's network in 2012, generating approximately $1.8 billion in new investment and over 6,200 new U.S. jobs in 23 states.

The 194 new and expanding facilities located on BNSF in 2012 included signature rail equipment manufacturing projects in Fort Worth, Texas and Rochelle, Illinois. Efforts in 2012 also included 44 projects to support the agricultural industry in 12 states, including 10 new grain shuttle facilities.

The expanding unconventional oil and gas industry continued as a major source of economic development projects for BNSF. As demand for crude oil from the various U.S. shale formations continues to rise, so do investments in new rail facilities. In response to this demand, last year the BNSF economic development team assisted customers in locating and completing five new crude oil unit train terminals in North Dakota and Montana. In addition, several new destination crude oil facilities were located in Washington, Missouri, Texas and Florida. These investments surpassed $300 million.

“2012 was a record year for BNSF economic development efforts. We broke our all-time job creation and project completion records and attained the second highest level of customer investment in our service territory.

And the second press release:

BNSF Railway Company (BNSF) today announced a planned 2013 capital commitment program of approximately $4.1 billion, approximately a $450 million increase over its 2012 capital spend of $3.6 billion.

The largest component of the capital plan is spending $2.3 billion on BNSF's core network and related assets. BNSF also plans to spend approximately $1 billion on locomotive, freight car and other equipment acquisitions. In addition, the program includes about $250 million for continued installation of federally mandated positive train control (PTC) and $550 million for terminal, line and intermodal expansion and efficiency projects. BNSF's expansion and efficiency projects will be primarily focused on capacity expansion to accommodate Bakken Shale related industrial products growth, intermodal terminal expansion, such as the completion of BNSF's Kansas City Intermodal Facility, and other terminal improvements to enhance productivity and velocity.

“This record capital plan continues our long-term focus on ensuring our network is prepared for the growing U.S. demand for freight rail,” said Matthew K. Rose, chairman and chief executive officer. “We are focused on investing to meet our customers' expectations and to expand capacity where growth is occurring. Given the importance of our low cost supply chain to the U.S. economy, our privately funded rail infrastructure is well positioned to ensure the U.S. ability to compete in global markets.”

Pretty incredible.