Canadian Railroads > Canadian crude-by-rail to triple in next two years

http://business.financialpost.com/2014/06/09/canadas-oil-industry-cuts-long-term-production-growth-forecast-to-4-8m-bpd/?__lsa=6eba-ca0b

Oil transportation by rail is expected to jump to about 700,000 barrels per day by 2016 from 200,000 bpd in late 2013, the Calgary-based lobby group (memo: Canadian Association of Petroleum Producers, or CAPP) predicted Monday in its annual crude oil forecast.

Oil supplies in Western Canada from the oil sands and from new shale plays continue to increase, while four major pipeline projects — Keystone XL, the TransMountain expansion, Northern Gateway and Energy East — await regulatory approval and construction.

“The crunch point is between 2015/2016,” said Greg Stringham, vice-president for oil sands and markets at CAPP. “So far we haven’t seen any oil being shut in, it’s all being able to be produced. But when it gets that tight you start to see some impacts on the market, and the real question is how fast the rail piece can help alleviate that.”

One of the safety 'concerns' or 'solutions' has been train speed, which has a major effect on product flow and also car utilization. It would be curious to see how that plays out, for the regulation requirements side, the actual effectiveness but also the investment or speculation side as well.

TCnR Wrote:
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> One of the safety 'concerns' or 'solutions' has
> been train speed, which has a major effect on
> product flow and also car utilization. It would be
> curious to see how that plays out, for the
> regulation requirements side, the actual
> effectiveness but also the investment or
> speculation side as well.


If Canadian crude by rail volume triples, the tank car supply would at least triple. With even longer runs envisioned (to the Gulf, etc) car turn arounds will probably slow. That's on top of a constrained car supply as older cars are banned.

I saw this same process unfold when it was called RailBox. It was great to watch, but made a mess when the whole thing collapsed.

TransCanada (the Keystone XL folks) intend to file plans for a new crude pipeline from Alberta to Ontario, and eventually to New Brunswick (likely to Irving Energy). Reuters reports that the pipe would carry about 1.1 million barrels per day.

That converts to an equivalent of about 1400 rail tank cars.

The Canadians seem determined to get their oil and natural gas to export markets, with or without US help.

the territory I work has gone from this time last year = a handful crude loads a week to a point where very soon we will be running 100 car unit trains every 48 hrs...