manifest

Over the past two years the volume of crude oil shipped by rail from Canada has increased ten-fold.  Data from the Canadian National Energy Board (NEB) for the whole of Canada indicates that average rail crude exports in the first quarter of 2012 were about 16 Mb/d. That volume grew to at least 160 Mb/d in the first quarter of 2014. The increase in rail exports of crude is primarily being driven by pipeline capacity constraints. Today we introduce findings from RBN Energy’s latest Drill Down Subscriber report.

RBN Energy estimates that by 2015 rail terminal capacity to load heavy bitumen “dilbit” crude in Western Canada will be about 800 Mb/d. Unload terminals hoping to receive that crude on the Gulf Coast will have about 1 MMb/d capacity by 2015. Moving that crude by rail will compete directly with planned pipelines expected to be in service by 2015. Yet the details show only about 25 percent of Canadian rail terminals will be able to load railbit crude, which has less diluent. And the terminals that do handle railbit will not be handle larger unit trains. Today we continue our analysis of Canadian crude transport options.

News flash!  ---Rail transportation has become a very big deal in the business of transporting crude oil, NGLs and petroleum products!!----The whole world does not revolve around pipelines!   Yup, the media has discovered that hydrocarbons can ride the rails.   Never mind that liquid hydrocarbons have been moving in tank cars for 150 years.   The news is that rail is having a market impact like never before.  And that is because there has been a strategic shift in the way rail transportation is being used by the petroleum industry.   In Part II of our series we’ll dissect the strategies being used and discuss how things are evolving in the world of tank cars.