Existing Fleet

If as appears likely, US regulators impose new rail tank car safety standards by the end of 2014 including the phasing out of older designs, the cost for a new car could be as much as $150,000. Retrofitting older designs to meet new standards could range between $20,000 and $60,000 per car. The resulting higher lease costs, concerns about safety and lingering logistics issues from this past winter are leading to producers looking more favorably at pipeline projects. The latest data this week from North Dakota indicates crude-by-rail traffic out of that State fell by 11.5 % from 693 Mb/d in November 2013 to 614 Mb/d in May 2014. Today we look at the impact of these changes on future crude-by-rail traffic.