North Dakota Relying on Rail For Oil Exports

From this article in the Wall Street Journal we see that North Dakota is struggling to get oil out of the state to the refineries on the coasts where it will be turned into gasoline:

Statoil became a big player in the Bakken Shale when it agreed last year to buy independent firm Brigham Exploration Co. for $4.4 billion. The Norwegian company, which also has significant investments in south Texas’s oil-rich Eagle Ford Shale and in the natural-gas rich Marcellus Shale in the Northeast, is seeking to establish itself as a major producer of U.S. unconventional oil and gas.

“The rail solution supporting the Bakken business will increase the value of the oil significantly. This translates to substantial profits as production continues to grow,” Torstein Hole, senior vice president for Statoil’s U.S. onshore activities, said in a statement.

Statoil is not the first energy company to see railroads as an outlet to its fast-rising production in the Bakken region. In June, more than 325,000 barrels a day of North Dakota crude were estimated to be shipped by rail, more than double the amount seen at the end of last year, according to the state’s Pipeline Authority.

Refiner Phillips 66 has bought 2,000 cars to bring crude from the U.S. interior to its refineries all over the country. Tesoro Corp. also plans to bring in Bakken crude to its Anacortes, Wash., refinery by train starting in September. Marathon Oil Corp.,  an oil producer with large Bakken operations, ships about 14% of its Bakken production by rail.

If only there were more pipeline infrastructure that would allow oil from North Dakota to be piped throughout the country at rates much cheaper than rail. Anyone know of plans to build a pipeline near the area?


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