Tuesday, May 6, 2014

petroleum is likely to replace coal as U.S. railroads' main commodity transported, long term

A tanker train in the Mojave desert, California, led by a Rio Grande SD40T-2.
Coal is used to generate about half of the U.S.'s electricity, but the U.S. is undergoing a shift in its energy supply as cheaper natural gas production is increasing; moreover, crude oil production is sharply rising; and much of the recent increase in crude oil output has moved by rail. In 2008, American Class I railroads originated just 9,500 carloads of crude oil: in 2013 this had increased to around 400,000 carloads.

In 2012 coal represented 41% of originating tonnage and 21.6% of US railroads' revenue.  The 722 million tons of coal moved may seem a lot to overtake, but the quantities of oil awaiting drilling apparently are substantial.

Despite the impression from the well publicised wrecks of the last year, railroads have an excellent safety record regarding crude oil transport — better, in fact, than pipelines in recent years. Based on U.S. Department of Transportation data, the crude oil “spill rate” for railroads from 2002-2012 was an estimated 2.2 gallons per million ton-miles, compared with an estimated 6.3 for pipelines.

Hauling oil out of places like North Dakota will be a long-term business for railroads because trains are faster than pipelines, reliable and offer a variety of destinations.

BNSF Railway has bolstered its oil train capacity to a million barrels a day and expects that figure to increase further. To accommodate the growth, in part, BNSF is sinking hundreds of millions of dollars into track upgrades and other improvements in Montana and North Dakota. BNSF is also increasing train sizes, from 100 oil cars per train to as many as 118.

Coal and oil are both hydrocarbons, the burning of which creates greenhouse gases, but there is now major Federal focus on carbon capture and storage technology - website

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