March 1, 2016 – Railway Age
RBN Energy: Western Canada CBR load capacity "overbuilt and underutilized"
By: William C. Vantuono
According to an analysis conducted by Sandy Fielden of RBN Energy LLC, based on current demand, rail load capacity for crude by rail (CBR) in Western Canada is “vastly overbuilt and underutilized.”
“As we have said, Canadian CBR has been a marginal utility to help get producers past severe congestion on the pipelines,” writes Fielden in Slow Train Coming: Canadian Crude Rail Load Terminals Overbuilt and Underutilized. “In the current price environment, rail is certainly not an attractive alternative if pipeline capacity is available. But remember that Canadian crude production is still set to expand in the next two years, and major pipeline projects out of Canada appear mired in permitting difficulties at the moment. That means rail may well come into play sooner rather than later in order to get new barrels to market. The challenge then will be using CBR while still maintaining positive netbacks at the least if, as expected, oil prices stay lower for a lot longer.”
Read the full article here: http://www.railwayage.com/index.php/management/rbn-energy-western-canada-cbr-load-capacity-overbuilt-and-underutilized.html
