Western Railroad Discussion > New Crude by Rail Transload Terminal Planned for Wellington Utah

I came across this news item from Savage Industries announcing plans to develop a crude-by-rail transload facility allowing crude oil to be shipped by rail to North American markets from Wellington Utah. Here's a quote from the article:

“Developing a new Savage transload terminal in Wellington will allow Uinta Basin producers to increase their production and access new markets without the logistical challenges of long-haul trucking or waiting on other logistical solutions requiring long lead times,” said Jason Ray, president of Savage Infrastructure

I guess this plan is a reaction to the lengthy delay in getting a rail line built into the Unita Basin. More traffic for the former DRGW mainline if it comes about.

https://savageco.com/press-release/savage-wellington-transload-terminal-to-provide-utah-crude-by-rail-connection-unlock-economic-growth-opportunities-for-producers-and-refiners/


cp1400

I'm curious what the capacity will be in daily output by rail.  Looking at the projected rail output projections could have put as many as 6 loaded unit trains eastbound along to Colorado River on to Denver and to all points east, with 6 MTs returning.  I may have my math wrong but I was surprised that this would about double the crude by rail in the US.  The trans load facility will I suspect create an enormous amount of truck traffic on local roads if it were to contribute anywhere near that amount of output.  

https://www.skyhinews.com/news/supreme-court-to-hear-uinta-basin-railway-case-potential-to-reinstate-approval/#:~:text=According%20to%20a%20press%20release,before%20reaching%20Gulf%20Coast%20refineries.

https://www.eia.gov/petroleum/transportation/


 

Drill-baby-drill
RB

DocVooDoo Wrote:
------------------------------------------------------
> I'm curious what the capacity will be in daily
> output by rail.  Looking at the projected rail
> output projections could have put as many as 6
> loaded unit trains eastbound along to Colorado
> River on to Denver and to all points east, with 6
> MTs returning.  I may have my math wrong but I
> was surprised that this would about double the
> crude by rail in the US.  The trans load facility
> will I suspect create an enormous amount of truck
> traffic on local roads if it were to contribute
> anywhere near that amount of output.  
>
> https://www.skyhinews.com/news/supreme-court-to-he
> ar-uinta-basin-railway-case-potential-to-reinstate
> -approval/#:~:text=According%20to%20a%20press%20re
> lease,before%20reaching%20Gulf%20Coast%20refinerie
> s.
>
> https://www.eia.gov/petroleum/transportation/


someone mentioned they plow the roads,  they may grade them too, put down mag chroride
>
>
>  

This is yet another sign that the industry has little faith in the completion of the Uinta Basin Railway. Wildcat Midstream has invested significantly in expanding their operations, UDOT throwing millions at the roads used to haul oil, and now this. There is a reason that Rio Grande Pacific backed out of UBR, they likely don't see it being operable in the intermediate future and the bad PR was actively hurting their Tennessee Pass project in Colorado. Seven County Infrastructure Coalition has undertaken UBR to intentionally stir up controversy and hit as many regulatory hurdles as possible because they no longer have interest in building it, they are in this to have SCOTUS kneecap NEPA and the EPA.

Meanwhile UDOT is looking to decimate archeological sites in Ninemile Canyon to make it accessible to oil trucks, highway 40 is a nonstop logjam of oil trucks, and access to a larger market is standing to raise Utah gas prices.

While I don't think the Unita Basin Railway concept is dead, this sure shows a lack of faith in it being built.  And even though it won't be built, all of those bad, scary oil trains that people were trying to prevent crossing through Colorado are going to happen anyway.  Gotta love economics and the free(ish) market.  Guess they won the battle, but lost the war.

Nathan

I haven't done any serious research on Utah crude oil, but it does have some drawbacks.  The crude is thick, and has a high paraffin (wax) content. That means it needs additional processing to be turned into a marketable end product like gasoline, diesel, or lubricant. In cold weather it can freeze up, like certain Canadian crude oil. I have no idea of the drilling costs, extraction taxes, etc in Utah.

None of this is fatal, the oil markets have a way of dealing with this by discounts off the baseline West Texas Intermediate price. The recent discount is about $22 per barrel at the well head, with an offering price of $50 per barrel for "Utah crude". .  Subtract another $12-$16 per barrel for truck plus rail transportation cost.  Figure $15-$17 per barrel to refine the crude, maybe more. Paraffin may have a commercial value at market, I don't know.

With West Texas Intermediate crude oil priced at $70, I don't see how these folks will actually make any money.  If WTI rises to $100 or $150 per bbl, they can make a bundle.

I am soooooo glad that I did my transcon bicycle trip across US 40 way, way back in 1994.  Back then, that road was almost EMPTY of traffic.  It was wonderful.  A bicyclists dream.  I can't imagine it now.

Typical, foolish government decision to not allow the RR--now they'll have to spend a fortune to upgrade all those roads with OUR money that the oil rigs destroy.  So wrong.