A recent article in the Wall Street Journal, inspired us to look at the topic known in the industry as ‘Crude by Rail’. This game-changing trend in oil transportation has transformed the midstream business segment and continues to be a hot topic in the industry, the media, and a concern among the public.
Why Crude by Rail
The growth in domestic oil production has reshaped the flows of oil in this country. As new oil fields were developed away from existing pipeline infrastructure, a more flexible method of transportation was needed.
While pipelines are the safest and most efficient means of transporting oil, they are also inflexible and require lengthy planning and build times. Further, they are often tied up for years in the regulatory approval process and become hot-button political issues.
Transporting crude oil via railway system can be a time-saving and effective method of delivery. The nation’s railroads are constantly working to improve their operations in an attempt to heighten transport safety, and federal regulators have introduced new guidelines pertaining to the movement of oil.
The railway industry has instilled these guidelines without hesitation, claiming that it is transporting the “juice” of America’s economy and thereby helping the country realize its lifelong goal of ceasing its dependence on foreign energy.
History of Crude by Rail
Transporting crude oil by rail began in the year 1862, when the first railroad to reach Pennsylvania’s Oil Region was established. Stretching approximately twenty-seven miles, it was a single track line that could only deliver about fifteen percent (approximately 30,000 barrels) of the region’s monthly 200,000 barrels of oil.
The traditional wooden barrels used to hold the oil would often leak, and were not fully equipped to handle the job. Furthermore, the lack of effective train travel only seemed to add to the problem. The constant stopping and swaying of railway cars cost the United States thousands of dollars in oil every year until 1865, when inventors Amos and James Densmore designed a special railway car that could haul anywhere between eighty to ninety barrels of oil per trip.
Using their new car and affixing oil-filled barrels made of pine planks and banded with iron, the brothers were able to transport the materials from Pennsylvania to New York without any spillage. This led to a healthy dose of improvements in the railway system, including the creation of boiler-type tank cars in 1868. These cars could carry up to one hundred barrels and would not leak as a result of their metal construction. These cars are still being used in contemporary times.
Infrastructure Continues to Evolve
Nowadays, the railway system is still looking for new methods of enhancing its national infrastructure. It is actively working with state and local officials to make sure everyone involved with transports knows exactly what is passing through their stations at all times. Furthermore, they are heavily training personnel managers to be able to respond appropriately during emergency situations.
The railway industry is also cooperating with government officials who are responsible for reviewing and updating operating practices, and the industry is proposing enhanced designs and construction standards for all rail cars carrying crude oil in the hopes of integrating more modern and safer cars into its system.
More on Industry Trends and Crude by Rail
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