To hear proponents of Uinta Basin waxy crude oil tell it, all that’s keeping the hydrocarbon-packed region in northeastern Utah from significantly increasing production in the 2020s is a better way to transport their shoe-polish-like crude to Gulf Coast refineries than trucking to existing transloading facilities. And now, they think they’ve finally found it. If all goes to plan, by early 2023 a new, 85-mile short-line railroad will be in place to move at least two 110-car unit trains of waxy crude a day from the epicenter of Uinta Basin production to interconnections with two long-haul rail lines. That would give producers significantly enhanced access to markets far beyond the five Salt Lake City-area refineries to which they now truck some 90% of their output. Today, we conclude our series on the Uinta Basin with a look at the proposed Uinta Basin Railway crude-by-rail project and what it would mean for the play’s producers, as well as for Gulf Coast refiners.

In Part 1, we explained that the Uinta Basin is located more than 100 miles east/southeast of Salt Lake City, and that most of the crude oil production there occurs in parts of Utah’s Duchesne and Uintah counties (see Figure 1). The basin’s unusual waxy crude oil comes in two varieties: “black wax” crude with an API gravity of 30 to 34 degrees, and “yellow wax” crude with an API gravity of 38 to 44 degrees. In addition to being within the medium-to-light API range that many refineries desire, both black and yellow wax crudes have very low sulfur, acid and metal content — all good things from a refiner’s perspective. Over the past six years, Uinta Basin producers have been ramping up and fine-tuning their use of horizontal drilling and multi-stage hydraulic fracturing, and their efforts have been paying off. Recently, horizontal laterals of up to two miles and large-scale stimulation in over-pressured areas within the Uinta Basin’s Greater Altamont-Bluebell field (light-green-shaded area) have resulted in per-well output that compares favorably to the best in the Permian Basin. Waxy crude is also being produced in the basin’s Greater Monument Butte and Red Wash fields (tan- and red-shaded areas, respectively).