May 10, 2016 – Railway Age
RBN Energy on CBR: “All is not gloom and doom”
By: William C. Vantuono
A few years back, crude-by-rail (CBR) “emerged as the go-to fix that enabled pipeline-constrained shale regions to move fast-increasing volumes of oil to market,” writes RBN Energy LLC analyst Housley Carr in Slow Train Coming: What's Next for CBR. “But changes in the market—lower oil prices, slowing/declining production, new pipeline capacity—have been challenging and undermining CBR.”
“Only about 20% of U.S. nameplate capacity is being used, and further declines in CBR volumes are expected, prompting serious questions about CBR's future role,” says Carr, who in RBN Energy’s latest Drill Down Report, examines CBR’s pros and cons, its evolution, and its current status and prospects.
The four graphs in the lower illustration show the dramatic changes in market destinations for Bakken CBR since 2010. “In the early years, volumes moved from Petroleum Administration for Defense District (PADD) 2 (Bakken) to the crude hub at Cushing (red bars, also in PADD 2), but never exceeded 60 Mb/d (thousand barrels per day),” notes Carr. “Those volumes have dropped almost to zero in 2016. As CBR ramped up in 2014, significant barrels were moved to the Gulf Coast (PADD 3), peaking at 240 Mb/d in 2013. Since then, those volumes too have declined to near zero. In contrast, CBR to the East Coast (PADD 1) ramped up to 370 Mb/d in 2014 and remains above 340 Mb/d in 2016 year-to-date. Similarly, volumes moving to the West Coast (PADD 5) moved up to 145 Mb/d in 2014 and remain above 125 Mb/d in 2016 YTD.”
Read the full story here: http://www.railwayage.com/index.php/management/rbn-energy-on-cbr-all-is-not-gloom-and-doom”.html?channel=44
