Domestic crude-by-rail displaces foreign supplies – EIA reports

Freight train
Source: DollarPhotoClub

Bakken crude supplied by rail to U.S. East Coast refineries, along with U.S. crude production supplied by marine vessels from the Gulf Coast, has reduced demand for foreign crude oil at the East Coast refineries – Energy Information Agency reports.

The number of rail carloads of crude oil began rising in 2012, as production in the Bakken Shale and other shale plays grew. According to the North Dakota Pipeline Authority, Bakken rail outflow capacity totaled 965,000 barrels per day (bbl/d) at the end of 2013, compared to 515,000 bbl/d of pipeline capacity. While some refineries are being built or planned for the area, most Bakken crude oil will continue to be moved out of the region to be processed at refineries in other parts of the country.

The growth in crude-by-rail shipments to East Coast refineries has been made possible by expansions in the capacity to load and unload crude oil from trains. Some facilities handle individual rail cars or a small number of rail cars (known as manifest trains), and others are built for unit trains, which consist of 80 to 120 rail cars carrying crude oil.

EIA - net crude oil supply to PADD1 by source
Source: U.S. Energy Information Agency

Rail terminals are now better equipped to load and unload unit trains. Five years ago, U.S. rail loading capacity for crude oil was almost entirely for manifest trains, but now more than 30 loading terminals throughout the United States can accommodate unit trains.

On the East Coast, 10 terminals can unload crude oil unit trains. Crude-by-rail unloading facilities are located on both refinery property and at nonrefinery sites that have access to additional modes of transportation, including marine and short-distance pipeline, that allow the crude oil to be shipped on to refineries.

As more unit train unloading terminals have been added, some volumes that previously transferred to vessels in Albany before moving on to refineries in New York Harbor, the Philadelphia area, and Canada now are moved directly by rail closer to their ultimate destinations.

As a result, monthly rail receipts of crude oil accounted for more than half (52 per cent) of the crude oil supply to East Coast refineries in February. As U.S. and Canadian production of crude oil has increased, crude supply by rail to East Coast (PADD 1) refineries has grown, displacing waterborne imports of crude oil from countries other than Canada, such as Nigeria.

Source: EIA

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