Railroad Experiencing A Renaissance With Oil Boom

Railroads seem to be experiencing a renaissance of sorts as the volume of crude oil pumped out of the Bakken continues to set records. U.S. railroads lost about six years of rail-traffic progress as a result of the recession.

Shale drilling activities are helping to lead the charge with investments made during the past two years by oil and rail companies due to the accelerated growth in oil related traffic in the past four years.

With the controversies regarding pipelines, railroads are laying more rail and along with oil companies, constructing loading stations all over the Bakken to move oil products to market.

Railroad officials claim that pipelines will never completely replace rail because of the flexibility that rail provides in reaching more markets. Rail also can be cost effective and has the added advantage of preserving product integrity during shipping.

The major expansion of Dore, ND, crude-by-rail facility is nearing completion. The high-speed loading facility is getting closer to its goal of being capable of moving unit trains of crude oil from the Bakken to markets across the country.

The facility will soon have a total outbound capacity of 70,000 barrels a day. Construction of additions to the facility are nearly completed including a loading rack for unit trains, fixed tanks and a pipeline connection to Banner Transportation’s Market Center Crude Oil Gathering System located in North Dakota. Construction began in August 2011 with plans of being fully operational this spring. The site moves manifest rail car shipments to the Gulf Coast, West Coast and Mid-Continent. These types of facilities will have the capability of handling large unit train volumes along with manifest commodities such as fracturing sand, pipe and drilling supplies.

Frac sand loading stations have also been in construction at Dore and east of Fairview in addition to the crude loading station.

Railroad lines are moving forward with improvements to rail lines to help meet the demand for the oil related stations being built in the area. Railroads have been hauling crude for 140 years so the practice is nothing new, even though the volume is greater than ever.

New crude cars are showing up in the terminals. The biggest obstacle for shippers has been time necessary in ordering tank cars. Rail car manufacturers had scaled back during the recession so oil companies were finding less supply and longer wait times.

Rail car production is already at a three-year high as manufacturers expand to meet demand for crude, gas and sand cars used in oil and gas exploration.