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.

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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.

Man-Camp Moratorium No Longer An Issue, But Reasoning Is Specious

Updates

March 3, 2012: Link to Debbie Downer. Stark County bans all new man-camps. As noted below, this is not a big deal. McKenzie County will take up the slack. The commissioners provided a multitude of reasons; did not say anything about their dislike for men living together. See Richardton. Abbey. Just say "no" to millions of dollars.

Original Post

Link here to the Bismarck Tribune.

The moratorium would have expired next week, but commissioner Dan Kalil said the reasons for it being put in place haven’t changed.

“We’re still out of water, we’re still out of sewage capacity, we’re short of electricity and there’s no room on the highways for anyone else,” Kalil said.

Williams County has already approved 9,777 beds, and approximately 6,600 of those have actually been built, meaning there’s still another 3,000 beds or so before approved permits are maxed out.

Kalil said the commission’s discussion revolved around what kind of development it prefers for the county.

“If these companies need places for workers, they can build apartment buildings. They can make long-term investments. If this (oil development) is going to last another 20 to 30 years they can add some value to the community rather that set out more of these temporary beds,” he said.

This is not a major issue any more, the decision to ban additional man-camps. The reasoning is a bit specious. As far as I know apartment buildings use water, sewer, and electricity. If the boom is a bust, temporary man-camps go away; apartment buildings will remain, empty. 

But, this is why the Williams County decision is no longer a big deal:

• infrastructure is catching up
• companies are looking to contain costs this year and may actually cut back in some areas
• there are still about 3,000 beds approved yet to be added (30% of existing total)
• there are about twelve (12) new motels/hotels in Williston since the boom began
• countless number of apartment complexes have gone up since the boom began
• single-unit housing has increased significantly since the boom began
• the activity is moving south of Williston
• Minot will gladly take the higher earning, white collar, management and professional segment
• McKenzie County is still in an "expansionist move" and will take up the slack
  
• too many inexperienced mom-and-pop operators wanted to get into the man-camp business
• the agreement to allow consideration of the current man-camps to expand: most of these are professionally run, state-of-the-art

The only thing more man-camps might bring now are a) more mom-and-pop start-ups; and, b) lower nightly rates.

For newbies:

The North Dakota Bakken has two centers of activity: the north, and the south. The south is in the Dickinson area and will eventually see growth but right now it is not experiencing the growth that the north is experiencing. The north is centered in four counties: Williams, Mountrail, McKenzie, and Dunn.

Mountrail County took the initial lead but is now less active relative to the other three counties. The Sanish remains huge but Whiting is in manufacturing mode there and a status quo has developed. There are adequate resources.

Dunn County is dominated by the reservation. There is a lot of activity there; it will probably be more active than Mountrail over the long term, but it, too, seems to be in manufacturing mode and making do with the available resources.

Williams County has two areas of interest: north/northwest/northeast of Williston, and east/southeast of Williston. The first area will be developed more slowly; it's good, but not great, and CLR seems to have this area also in manufacturing mode, making do with the available resources.

McKenzie County has two areas of  interest: the northeast/north (just directly south of Williston and also northeast of Watford City; and, all the rest of the county.  The first area, the northeast/east area of McKenzie County and the east/southeast area of Williams County is the bull's eye of the Bakken in the north. This is where the activity is headed in 2012. As noted above, McKenzie County is still in expansion mode and will make up for any shortfall in man-camps due to moratoria in surrounding counties.