The Perfect Symmetry: Railways and Oil Production

Written by Oil, Gas, and Mining on . Posted in Oil and Gas

The following figures lay out the not unsurprising interdependence of railways and oil production:

Weekly US Crude Oil Production

Originated Carloads of Crude Oil on U.S. Class 1 Railroads

Quite simply: As crude oil production surges so does the need for rail transportation of that oil. The very same observation applies to natural gas production. In 2008, U.S. Class 1 railroads dealt with 9,500 carloads of crude oil; in 2013 that number increased to 407,761 carloads. That is a whopping forty-three fold increase in rail traffic! Each carload holds approximately 30,000 gallons of oil. And while pipelines offer an alternative to oil transport by rail, the pipeline infrastructure has not dramatically increased its capacity to accommodate the enormous increase in American and Canadian production. Railroads also offer a geographic flexibility to help oil reach refineries located across the U.S.

The rail industry is taking very seriously the increased volume of traffic and the increased need for safety. Route selection, equipment inspection, first responder training, speed postings, and perhaps most important, better tank manufacture, all go toward making moving crude oil by rail an economical and safe option. By 2016 at least 60% of all tank cars carrying crude oil will have been upgraded to be more structurally safe and feature the enhancements highlighted in the figure below.

Evolution of Rial Industry Tank Car Standards for Crude Oil

The rail industry plans a speedy retirement for all tank cars that do not have these features and is quickly expanding production of their replacements that meet the new safety standards. It is a bit of a race to make sure the transportation infrastructure for oil and gas keeps pace with the expanding development of unconventional resources.

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