Crude by rail supply in the US

The EIA has reported that monthly rail receipts of crude oil accounted for 52% of the crude supply to East Coast refineries in February 2015. As US and Canadian production of crude oil has increased, crude supply by rail to East Coast refineries has grown, displacing waterborne imports of crude oil from other countries other than Canada, such as Nigeria. While refinery utilisation in PADD1 in early 2015 has been below typical levels, this still marks the first time in EIA’s dataset that crude deliveries by rail have accounted for such a high percentage of East Coast refinery supply.

The growth since 2010 in inland domestic and Canadian crude oil production has created an opportunity for US and Canadian railroads to move crude oil to US refining centres on the Gulf, East and West coasts as well as to refineries in Canada. Much of the crude oil moved by rail is produced from the Bakken Shale in North Dakota and eastern Montana. Bakken crude supplied by rail to US East Coast refineries, along with US crude production supplied by marine vessels from the Gulf Coast, has reduced demand for foreign crude oil at the East Coast refineries. In January last year, domestic crude oil accounted for half of all East Coast refinery crude oil receipts, and crude by rail net receipts to the East Coast surpassed non-Canadian crude oil imports.

Enabling growth

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, and others are built for unit trains, which consist of 80 – 120 rail cars carrying crude oil.

Rail terminals are now better equipped to load and unload unit trains. Five years ago, US rail loading capacity for crude oil almost entirely for manifest trains, but now more than 30 loading terminals across the US 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 non-refinery 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 Harbour, the Philadelphia area, and Canada now are moved directly by rail closer to their ultimate destinations.

Edited from press release by Claira Lloyd

Read the article online at: https://www.hydrocarbonengineering.com/refining/06052015/us-crude-by-rail/