Railways – The Infrastructure of Choice
BNSF Railway, Burlington Northern Santa Fe LLC, is one of North America’s leading freight transportation companies operating in 28 states and two Canadian provinces. Their history takes them back over 160 years.
As the Bakken’s shale output continues to exceed pipeline capacity, producers turn to railways such as BNSF to reach refineries quicker and more efficiently. BNSF currently transports approximately one-third of the Bakken oil production.
BNSF CEO Matthew Rose recently commented that rail is becoming the infrastructure of choice because of three components: flexibility, reliability and safety.
However, new EPA regulations on Tier 4 standards are expected to require exhaust gas after-treatment technologies. These regulations become effective 2015 and have led BNSF to begin the testing stages of using liquefied natural gas as an alternative fuel. This transformation in the industry could help lower emissions and could save a substantial amount of money in diesel costs as diesel prices continue to rise. BNSF is hoping to reduce their company’s diesel consumption by over 75 percent by using natural gas as a fuel. This cost savings will not only be beneficial to BNSF but to the producers as well.
Transporting crude via railway has many advantages, two of those advantages are: 1) it takes an average of 40 days to transport crude oil from the Bakken to the Gulf via pipeline and only 90 hours each way via train. 2) Trains are able to reach markets that pipelines don’t which creates more profits to the producer.
Deliveries of crude oil via railways leaped an astonishing 52 percent in June 2012 compared to June 2011. Expect these numbers to rise as the Bakken continues to develop.