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Dan,

"In 2008, fewer than 20,000 barrels a day of crude oil moved on trains in the U.S. By the end of 2012, that number had jumped above 500,000 – a more than 25-fold increase in five years."

So they are planning on doubling it in a year. That really has to make up for some pipelines not being built. Yet a lot of oil companies are still scaling back drilling plans for the year ahead.


In many cases, unit trains of a hundred or more tank cars can move on existing railroad rights of way, with no need to obtain environmental or other permits or to leap any of the many other regulatory hurdles that dedicated pipelines encounter. Further, if existing rail capacity is not sufficient, there are virtually no regulatory hurdles to expand capacity on existing rail lines, either by upgrading the existing track for higher speed and adding more sidings where trains can pass one another or by adding parallel tracks for additional capacity, and there are a lot fewer regulatory hurdles to build a new rail line than to build a dedicated pipeline.

The only real "down side" to transporting oil by rail rather than by pipeline is that one needs storage for surges at both ends. A unit train operation attains its maximum efficiency when each train can fill from storage tanks at the shipping end and empty into storage tanks at the receiving end, thus minimizing the amount of time that the train is at each terminal, and there are sufficient sidings of sufficient length, or sufficient sections of double track, so trains do not encounter delays either (1) when meeting trains travelling in the opposite direction or (2) when overtaking slower trains. Here, a line that's fully double track, or even triple or quadruple track if other rail traffic warrants, is the ideal.

Norm.
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