Posted: Feb 12, 2013 8:26 AM by Jay Kohn - MTN News
BILLINGS - Rail traffic is continuing to play a growing role in getting Bakken crude oil to market.
The North Dakota Pipeline Authority, one of the biggest transportation stories of the past year, has been the ongoing expansion of rail transportation in the Williston Basin.
Rail transportation now accounts for 58% of all crude oil movements from the Bakken, up from 22% from a year ago.
Since most of North Dakota and Montana's crude is refined out of state and new pipelines are still years off, transporting the Bakken's 750,000 daily barrels depends more on more on trains.
It's actually a win-win for the railroads, as trains are also bringing in much of the equipment and raw material used for hydraulic fracturing.
A new 700-rail car facility was recently completed just across the border from the North Dakota oil fields.
The Williston Area Economic Development Office reports that 18-unit trains and manifest train facilities serve western North Dakota, with as many as 12 more in the planning or construction phase.
The largest oil rail-car shipper in the Bakken is Burlington Northern Santa Fe (BNSF) with Bloomberg Financial News reporting that BNSF plans to boost its crude oil shipments by 40% by end of this year.
While rail is typically more expensive to use than pipelines, rail cars can reach markets that pipeline don't, and that can yield higher prices for producers.
Wyoming is also poised to become a bigger player in the oil-rail car game. Cogent Energy Solutions and Granite Peak Developments announced plans in late January to build a crude oil unit train loading facility at Casper's Logistics Hub.
Construction on that new facility is slated to begin in April with completion set for Oct 2013. The facility's design will allow for loading of multiple grades of crude oil, both heavy and light, while also providing blending on-site.
The new Casper facility will have an initial capacity of 900,000 barrels of crude with expansion up to three-million barrels.