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Refinery receipts of crude oil by rail, truck and barge increase

Hydrocarbon Engineering,

According to a recent report by the Energy Information Administration (EIA), the use of rail, truck and barge to deliver crude oil to refineries has increased, partly due to increases in crude oil production.

The Gulf Coast (PADD* 3) region accounts for most US refinery receipts by rail, truck and barge. PADD 3 is increasingly dependent on rail and truck to move crude production out of the Eagle Ford and Permian basins to refineries in the area until pipelines are built. Rail, truck and barge receipts in this region nearly doubled in 2012.

In the Rocky Mountain region (PADD 4), domestic truck and pipeline imports of Canadian oil imports continue to increase, while domestic pipeline receipts remain flat.

The East Coast (PADD 1) receipts by rail, truck and barge decreased in 2011, partly due to refinery closures, but have increased by 18% in 2012 as a number of refineries established rail facilities in order to receive discounted crude from the Bakken and other tight oil formations.

Overall, refineries across the nation received more than 1 million bpd by rail, truck and barge in 2012. This is a 57% increase on 2011 figures. In comparison, total refinery receipts of crude oil are approximately 15.2 million bpd, more than half of which is transported by pipeline.

Truck and rail offer an alternative transportation mode for crude when pipelines are operating at capacity or a production area lacks pipeline infrastructure. Both offer greater operational flexibility than pipelines as they make use of existing road and rail infrastructure near producing basins in order to transport crude to refineries that may not be accessible by pipeline.

Even as additional pipeline infrastructure is put into place, crude oil is expected to continue moving by rail and truck.

 Increases in barge receipts may partially be explained by crude oil being transferred to barges from rail cars for the final leg of some journeys to refineries, particularly in the East Coast region and along the Mississippi River, the report finds.

*The Petroleum Administration for Defense Districts (PADDs) are geographic aggregations of the 50 States and the District of Columbia into five districts: PADD 1 is the East Coast, PADD 2 the Midwest, PADD 3 the Gulf Coast, PADD 4 the Rocky Mountain Region, and PADD 5 the West Coast. Due to its large population, PADD 1 is further divided into sub-PADDs, with PADD 1A as New England, PADD 1B the Central Atlantic States, and PADD 1C comprising the Lower Atlantic States. There are two additional PADDs (PADDs VI and VII) that encompass U.S. Territories. The PADDs help users of EIA's petroleum data assess regional petroleum product supplies.

Adapted from press release by Emma McAleavey.

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