North Dakota Bakken Crude Oil

gokeefe wrote: Sounds like the high roller days in the Middle East states are about to come to an abrupt end. That's probably a bad thing for stability in that part of the world, especially for the Gulf States.

I don't think the Gulf States are going to be in trouble unless China manages to tap their Shale some time soon. Their Geology is a bit different requiring a variation of US techniques. The countries who will hurt are Nigeria, Angola, Libya, Algeria, and Iran(the oil they are able to sell evading sanctions sells for the Brent price. If their production is allowed back on to the market it will depress worldwide prices, significantly reducing their net monetary gain, plus they have been practicing deferred maintenance on their oil field infrastructure, with similar effects to what happened with US railroads).

JayBee wrote:

gokeefe wrote: Sounds like the high roller days in the Middle East states are about to come to an abrupt end. That's probably a bad thing for stability in that part of the world, especially for the Gulf States.

I don't think the Gulf States are going to be in trouble unless China manages to tap their Shale some time soon. Their Geology is a bit different requiring a variation of US techniques. The countries who will hurt are Nigeria, Angola, Libya, Algeria, and Iran(the oil they are able to sell evading sanctions sells for the Brent price. If their production is allowed back on to the market it will depress worldwide prices, significantly reducing their net monetary gain, plus they have been practicing deferred maintenance on their oil field infrastructure, with similar effects to what happened with US railroads).

Why the separation between the two groups? If the Brent price goes down they are all in the same basket. No?

Discussion regarding the Casselton ND collision incident occurring today is moving forth at the BNSF Forum:

http://www.railroad.net/forums/viewtopi ... 9&t=153963" onclick="window.open(this.href);return false;

gokeefe wrote:
Why the separation between the two groups? If the Brent price goes down they are all in the same basket. No?

The Gulf States have lower production costs than the African States and Iran. Also the African States are spending every cent they take in to prop up their Governments. Any cutbacks in their Domestic spending caused by a drop in Oil Revenues will likely destabilize their governments. Reports I have seen indicate that Nigeria will be in trouble if the Brent price drops below $100/bbl, Angola and Libya at about $97/bbl, Iran at $95/bbl. It is doubtful that Brent could drop low enough to cause serious trouble for the Gulf States, some pain yes, but trouble no.

JayBee wrote:It is doubtful that Brent could drop low enough to cause serious trouble for the Gulf States, some pain yes, but trouble no.

Very interesting. I was under the impression that the Saudis have had to increase domestic spending substantially in recent years and that this has put pressure on their budgets.

Grain or oil?

Grain farmers in Alberta, Canada, are having difficulty moving last fall's record harvest to various markets by rail because of competition from crude-oil producers for rail service, according to the Alberta Federation of Agriculture.

http://progressiverailroading.com/rail_ ... ers--38955" onclick="window.open(this.href);return false;

Oil has a value per ton that is about twice the price of wheat, three times the price of corn. This year's corn harvest in the US was much better than last year. Are US farmers competing for rail capacity with Bakken crude?

A letter to the editor in today's issue of the Bangor Daily News has some interesting observations/suggestions regarding tank car design. Have a look:

http://bangordailynews.com/2014/01/07/o ... fety-gmos/" onclick="window.open(this.href);return false;

(It's the third letter on the page, under the headline "Rethink design")

Inevitable:

http://online.wsj.com/news/articles/SB1 ... 1635384130" onclick="window.open(this.href);return false;

Brief passage:

• Currently, there is about $1.5 billion liability insurance available for a big North American railroad, Mr. Beardsley says. The worst-case accident scenario "is multiples of that," he says.
  
  Railroads are required by law to transport hazardous materials, which include crude oil. And when they haul it, they are liable for it.
  
  Recent events underscore the perils. In the past two months, there have been three fiery oil-train derailments besides that in Lac-Mégantic: one in Alabama in November, one in North Dakota at the end of December and one just Tuesday at Plaster Rock, New Brunswick, near Maine.
  
  Though these didn't involve injuries, they showed another peril, an unexpected volatility in crude-oil cargoes. And two of the three involved not small railroads like the one that derailed in Lac-Mégantic but major railroads.
  
  Says E. Hunter Harrison, chief executive of Canadian Pacific "I've been through this for 50 years. When the phone rings at 3 o'clock in the morning, I get jumpy. Even when I get calls after hours on the weekends, I say, 'Don't tell me.' "
  
  The recent accidents aside, rail transport is generally considered safe; more than 99% of hazardous rail shipments arrive safely. Indeed, it is this very safety that keeps railroads from being able to refuse to carry hazardous cargoes. They have a legal "common carrier" obligation to haul cargoes that barge and truck lines can turn down. Railroads haul 150 million tons of hazardous materials a year, a growing amount of it crude oil.
  
  

Got 'derailed' myself with a phone call. While Fair Use limits my quotation to that comprising a Brief Passage (actual term used within USC), this is interesting material. It even suggest that a Class I coul be 'tapped out' of insurance coverage.

jstolberg wrote:Grain or oil?

Grain farmers in Alberta, Canada, are having difficulty moving last fall's record harvest to various markets by rail because of competition from crude-oil producers for rail service, according to the Alberta Federation of Agriculture.

http://progressiverailroading.com/rail_ ... ers--38955" onclick="window.open(this.href);return false;

Oil has a value per ton that is about twice the price of wheat, three times the price of corn. This year's corn harvest in the US was much better than last year. Are US farmers competing for rail capacity with Bakken crude?

I'm having trouble with the credibility of this story. This sounds to me like the railroads are refusing to call on their extra boards or use other available means to run more trains that might cost them more than their current scheduling. The legality of this type of business practice seems dubious in light of their common carrier obligations.

"Are US farmers competing for rail capacity with Bakken crude?"

It's not just grain shippers and this is not a "railroads being cheap" issue; it's the simple fact that CBR-related volume growth has outpaced capacity growth. Bottom line: There are capacity constraints in northern oil regions which will only be cured over time by continued capital investment.

Cowford wrote:
It's not just grain shippers and this is not a "railroads being cheap" issue; it's the simple fact that CBR-related volume growth has outpaced capacity growth. Bottom line: There are capacity constraints in northern oil regions which will only be cured over time by continued capital investment.

Thanks for the confirmation and clarification. I find it fascinating that an area that was once considered overbuilt and which had main line capacity as far as the eye could see is now constrained and unable to handle all of the traffic.

Is there discussion of end to end main line double track on some of the northern transcontinentals?

Double tracking is planned for Minot on west as far as Williston, from what I've read.

Further west, just east of Glasgow, a new siding is at Whately; actually it's three tracks worth of sidings there, so as to be able to get eastbounds off the main, if needs be.

East of Minot, directional running has been taking place more and more between Minot and Fargo. KO Sub one way; Devils Lake/Hillboro Subs the other.

I've not read anything that suggests that BNSF is contemplating double tracking the whole Northern Transcon.

Rockingham Racer wrote:KO Sub one way; Devils Lake/Hillboro Subs the other.

Interesting to note that as recently as a year or two ago the Devil's Lake Subdivision was considered excess mileage as well. With the additional shale oil in the Southwest I have to wonder if something similar could happen to the former Santa Fe main in New Mexico now used exclusively by the Southwest Chief.

From the Bangor Daily News:

Bangor Daily News wrote:More crude oil was spilled in U.S. rail incidents last year than was spilled in the nearly four decades since the federal government began collecting data on such spills, an analysis of the data shows.

Including major derailments in Alabama and North Dakota, more than 1.15 million gallons of crude oil was spilled from rail cars in 2013, according to data from the Pipeline and Hazardous Materials Safety Administration.

By comparison, from 1975 to 2012, U.S. railroads spilled a combined 800,000 gallons of crude oil. The spike underscores new concerns about the safety of such shipments as rail has become the preferred mode for oil producers amid a North American energy boom.

Read the rest of the article at: http://bangordailynews.com/2014/01/20/n ... data-show/" onclick="window.open(this.href);return false;

Mr. Maine Central, OUCH!!!

Into how many other McClatchy newspapers did that article find its way?

When will the pols (it's an election year lest we forget) start yelling 'We will get this oil off those unsafe railroads so your children can sleep safely through the night'. 'We will create American jobs for Americans when we start laying the Keystone pipeline'.