increased traffic,” Rose says. “This year we plan to spend about $US 200m on crude by rail-related infrastructure, and we will invest significantly more next year. We believe we will get our investment back.” BNSF’s capacity improvements will


help to better serve pipeline operators and shortlines which have built 12 terminals adjacent to BNSF and CP railway infrastructure in northwest North Dakota in the past two years alone, taking the total to 16 (see map). These are handling crude delivered by truck or pipelines, and according to the NDPA, terminal capacity has increased to 730,000bopd since they were built.


“This year we plan to spend about $US 200m on crude by rail-related infrastructure, and we will invest significantly more next year. We believe we will get our investment back.” Matt Rose


One of the larger terminals is Bakken


Oil Express (BOE), which is owned by Kansas-based Lario Logistics and began shipping oil from its 121.4 hectare site west of Dickinson, North Dakota, in November 2011. Initially the facility had capacity for


100,000bopd using four 2.4km loops, but now handles 200,000bopd. Further expansion projects are underway, including adding a perimeter loop, which will eventually increase capacity to 500,000bopd. The facility’s main customer is Eighty-


Will Lac-Mégantic spell the end for crude by rail?


crude oil by rail firmly into the spotlight. RailwayAge contributing editor, and


T


president of Railroad Financial Corp, Mr Tony Kruglinski says that even before the derailment, tank car safety was in the sights of regulatory authorities in both Canada and the United States and industry was expecting some of the regular safety tightening that it experiences each year. However, he does not believe the transport of oil by rail in North America is under threat. For one, he says many of the current


oil shippers have been moving far more dangerous commodities by rail for decades and they have done this because it is one of the safest ways to move hazardous liquids in bulk across long distances. Rail’s flexibility and nationwide reach also means it is likely to remain important to oil shippers. In addition, tank car safety has been


and remains a big issue. Every new tank car built since late 2011 has been constructed to stringent new safety standards. It has not yet been clarified


Eight Oil, which delivers oil using its Belle Fourche pipeline, while other customers use trucks to transport oil from across Stark County. Other major terminals include Enbridge’s expanded hub at Berthold, which has capacity for 80,000bopd, and the Colt Hub in Epping, which like BOE is an open-access facility and can handle 120,000bopd. These oil terminals are not the only


HE Lac-Mégantic disaster on July 5 has placed safety concerns surrounding the transport of


whether the tank cars involved in the derailment were of an older design. However, the circumstances of the accident appear to rule this out as a contributing factor. “It is not difficult to predict that the industry (voluntarily or otherwise) will increase its efforts to ensure it is running safely in all respects,” Kruglinski says. “I also think there will be a full and frank discussion about additional safety enhancements in new car design as well as to existing tank cars. “However, during this discussion I


am sure that one or more experts will point out that a train of five locomotives trailing more than 70 fully loaded tank cars was travelling downhill at over 110km/h when the accident occurred. I am not a structural engineer, but I seriously doubt that at those speeds even the best engineered and manufactured tank cars would have survived uniformly intact. “So, it is my prediction that crude by


rail will continue to grow after significant industry and regulatory introspection. But like most things after a major accident, it will be more involved and more expensive.”


ones to have sprung up to serve the Bakken. Railways are also benefitting from demand for products to aid the fracking process, particularly sand, which is used to prop open fissures in shale formations to allow oil and natural gas to flow. The Association of American


Railroads (AAR) reports that sand shipments on US railways have


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