Return of Crude to PAR?

I've noticed a number of interesting things going on in the Crude by Rail (CBR) traffic across North America. Of course now, after several accidents, regulators are looking at stricter rules for CBR traffic. Nearly 6 months since the last shipment of CBR over Pan Am (My records show October the last), I believe this traffic is poised to come back in the next year or so.

Firstly, Irving Oil is looking to ship oil to Saint John not just to refine, but also to export. This is mostly relevant to Alberat based tar-sands oil, not really PAR. However, it is certainly possible that with more oil coming in, PAR can be in a position to regain its traffic to the refinery.

However, here is something interesting.... PAR joins the AAR. In a somewhat quiet move, it really served little or no purpose until you put the pieces together. Of course, this is all speculation but consider the political landscape right now and the timing of all these events. Here are some news sources about AAR binding with new CBR regulations:
http://www.wday.com/event/article/id/93815/" onclick="window.open(this.href);return false;
http://www.pressherald.com/news/Crude_o ... ally_.html" onclick="window.open(this.href);return false;

Furthermore, there are some other developments going on.

BNSF is purchasing 5,000 new tanks. Surely a big sign of a long-term future for CBR. I estimate it will be 10 years. Also, once it's done, the tanks can be repurposed. Perhaps a less risky decision than some may think.
http://www.reuters.com/article/2014/02/ ... BE20140220" onclick="window.open(this.href);return false;


Irving doesn't expect its announcement to retrofit their crude oil fleet to hinder their plans for the CBR facility being built in Alberta.
http://www.platts.com/latest-news/oil/c ... t-21233300" onclick="window.open(this.href);return false;

H. Harrison's first big speech since taking the helm at CP Rail and it includes talk about Crude oil. From his comments, they aren't actively pursuing the business, but they will ship it if they have to. I find that particular comment interesting... and maybe more of a PR stunt than actuality.
http://www.calgaryherald.com/business/H ... story.html" onclick="window.open(this.href);return false;

The political landscape for Albany CBR terminal is also mounting...
http://www.theepochtimes.com/n3/511943- ... -shipping/" onclick="window.open(this.href);return false;

My thoughts: The first tell-tale signs for a return to CBR to PAR will come this spring when we see what the maintenance plans look like. The problem is really the 65 miles from NMJ to Keag. A lot of people thought the joint bid for the MMA lines to Brownville Junction from NMJ was an effort to get a better line for CBR shipments. We will see what happens, but it is my belief you will see this traffic come back to PAR at some capacity.

Thoughts?

I agree and find the analysis regarding the AAR very telling. In the context of Crude By Rail it makes tremendous sense. I see no reason why PAR would be trying to get away from this traffic and furthermore believe that they want to have it back on their rails as much as ever.

CN9634 wrote:My thoughts: The first tell-tale signs for a return to CBR to PAR will come this spring when we see what the maintenance plans look like. The problem is really the 65 miles from NMJ to Keag. A lot of people thought the joint bid for the MMA lines to Brownville Junction from NMJ was an effort to get a better line for CBR shipments. We will see what happens, but it is my belief you will see this traffic come back to PAR at some capacity.

The joint bid by PAR and JDI shows the co-operation already in place and reinforces a statement I made a year or two ago of the possibility of creating a joint EMR/PAR ownership scenario from Waterville to Keag. The main reason would be to re-establish a safe and reliable CBR routing via PAR again as an alternative to CN. Any upgrades and payoffs that CMQ will be able to use to soothe over anxieties about CBR trains again rolling through the townships will be years off at least which leaves JDI with again a one road option. Albany will continue to be a great asset to them, but rail is also definitely going to play heavily into their future plans.

What no one else seems to be touching on is the rise in rail loadings in the northeast of propane. I think you may see Irving starting to push its propane throughout New England if they can have a reliable PAR to deliver it. As it stands now most, if not all propane by rail is coming from the Marcellus Shale and other midwest points via either CSX or NS. PAR/S currently has 3 large customers that could potentially get loads from Saint John with a far more compettive rate with a EMR/PAR/S routing. The only way to do this is with a safe and reliable line.

Finished forest products moving south from MNR are on the rise and when the Ashland mill comes online look for a MNR/EMR/PAR routing instead of a MNR/CMQ/PAR routing via the new connector at Brownville. This key connector dooms any overhead traffic CMQ might think it was getting from the county south to the eastern seaboard.

Along those same lines, if JDI is realistic about pushing fiber to existing mills in Maine, most of them are on PAR lines and will need safe reliable rail lines to make the car cycles efficient and cost effective.

Intermodal? Possible restart to Ayer to Saint John service once again. Again track speeds need to be raised and consistent timeframes met to compete with I-95 trucking.

What this all means is a huge maintenance program for the old MEC north of Waterville. The majority of the traffic is coming from JDI subsidiaries anyways, it may make sense for them to secure a safe reliable connection to CSXT and/or PAS.

Why doesn't Pan Am just sell their remaining trackage north of Waterville to EMR to get this track upgraded, better local service to customers, and more interchange traffic between EMR/PAR.

oat324 wrote:Why doesn't Pan Am just sell their remaining trackage north of Waterville to EMR to get this track upgraded, better local service to customers, and more interchange traffic between EMR/PAR.

The answer lies in the owner of the RR.

oat324 wrote:Why doesn't Pan Am just sell their remaining trackage north of Waterville to EMR to get this track upgraded, better local service to customers, and more interchange traffic between EMR/PAR.

Because if they fix it themselves the revenues will be all theirs. Keep in mind this line really wasn't all that relevant until the oil trains came online.

Maybe Tim Mellon will retire and get out of the railroad business.
NS gets Rotterdam Jct. to Portland
The Irvings get everying north of Portland, including Rigby yard and Waterville shop.
Don't bet the farm...

Dick H wrote:Maybe Tim Mellon will retire and get out of the railroad business.
NS gets Rotterdam Jct. to Portland
The Irvings get everying north of Portland, including Rigby yard and Waterville shop.
Don't bet the farm...

Interesting. I would imagine CSX taking the line and beyond Portland to Waterville to at least reach SAPPI. Yes, I think Irving would certainly be interested in the line from Waterville to 'Keag. NS would want to get to Waterville as well, but CSX has more at stake and would shell out more dinero. Such a scenario would no doubt result in the return of crude oil traffic.

I'd be very surprised if either of the Class 1's bought anything from PAR. Even if either of them bought north to Portland, what are they gaining over the competitor, four trains a day? Bean counters would be crunching those numbers to justifiy added terminal, crew and MOW expenses. I think they are quite comfortable letting someone else run trains to them and edging out the competitor with pricing. But you never know….

CSX has things exactly the way they want them. They hand off a train to Pan Am, and they get one from them every day. Minimal investment.

The Boston Line is already at capacity. The potential revenue for them actually running any line in Maine is small beans compared to other potential ROIs on the rest of the system. I don't think they would ever go for it.

NS on the other hand has the most to gain from buying the B&M or parts of it. They obviously are making inroads in New England and want to continue doing so. If they can get the D&H South End I think the B&M would next, without question.

I can see CSX reopening Waterville intermodal, revamping District 1 capacity, and adding business all over the line. Take a look at all the trucks moving out of Maine. If you stand at Mile 0 of I-95 south and face southwest towards Mass, you'll hear a huge sucking sound. The brutal truth is PAR doesn't have the capacity to grow the business, primarily because of financial mismanagement and a Class I with greater financial leverage would add a lot of traffic to that line. Irving, who controls 50K carloads plus a year, is a diamond in the rough that CN sucks traffic out of with no effort. Easily could go CSX/NS with a direct Class I connection.

I would love to see a 40 mph train thru Bangor or Old Town and know Irving/EMR would invest in that.

I think everyone is forgetting the fact that PAR still has to pass through MBTA owned lines
with its passenger traffic (despite the glacial restoration of double track). Then there's
the Merrimack River Bridge problem and its rebuilding.

Not to mention the near complete overhaul of the Freight Main between CPF-LJ and CPF-WL,
unless they can get someone else to rebuild it for them (i.e. Downeaster, the so-called Knoweldge
Corridor)...

D

GP40MC1118 wrote:I think everyone is forgetting the fact that PAR still has to pass through MBTA owned lines
with its passenger traffic (despite the glacial restoration of double track). Then there's
the Merrimack River Bridge problem and its rebuilding.

Not to mention the near complete overhaul of the Freight Main between CPF-LJ and CPF-WL,
unless they can get someone else to rebuild it for them (i.e. Downeaster, the so-called Knoweldge
Corridor)...

D

There are two siding projects on the books between Portland and Dover as well. One extends Surf to the Biddeford industrial spur and the other Berwick to Dover.

GP40MC1118 wrote:I think everyone is forgetting the fact that PAR still has to pass through MBTA owned lines
with its passenger traffic (despite the glacial restoration of double track). Then there's
the Merrimack River Bridge problem and its rebuilding.

Not to mention the near complete overhaul of the Freight Main between CPF-LJ and CPF-WL,
unless they can get someone else to rebuild it for them (i.e. Downeaster, the so-called Knoweldge
Corridor)...

D

The Merrimack's finally funded and has its construction schedule more or less set, so that'll take care of itself. Congestion's definitely an issue, though.

I'm wondering when the MBTA finally buys land north of Haverhill station for a Bradford-replacement layover if they'll move Bradford station onto the displaced layover tracks with an island full-high platform or something and free up one or both of the mainline tracks for passing opportunities before the bridge. Plaistow station would be on a turnout if approved, Lawrence is on a turnout. Put Bradford on a turnout and it chops up commuter rail traffic with enough passing ops between Lowell Jct. and the state line to keep things moving under heavy load.

They're going to have to do something with the Fitchburg Line, though. Contiguous tri-tracking from Willows to the current end of triple at Macpherson Rd., reconfiguration of the Ayer platforms and/or Greenville Branch track connection less awkwardly in the middle of the nerve center of that busy junction, upgraded triple from the foot of N. Leominster station all the way to foot of the 2nd Nashua River bridge west of Fitchburg station, maybe even a passing siding in Shirley to similarly chop up all that passenger vs. freight congestion. And that's just where the state bucks can pay. They're on their own with the mainline west of Wachusett, the Stony Brook, and the Lowell Branch on speeds + capacity. And I don't think NS is going to take a leap buying east of Ayer unless PAR starts moving more goods of its own volition through improved track. They ain't going to be able to get buy wasting a few hours at a 10 MPH crawl between Ayer and Andover forever and hope to grow. Those connecting branches need some substantial love sooner or later.