!04 car train heads through Maine to Irving refinery in St. John New Brunswick a 300,000 bbl/d refinery, the whole story is on Easter Railroad News, this refinery has never used Canadian oil, first Venezuelan oil now they are buying oil from North Dakota, anything wrong with this picture?
Maybe Alberta ran out of oil eh?
Now your getting into Canadian history. It was always cheaper to bring oil over the ocean from first, the Middle East, and then from Venezuela than to ship it by pipeline from western Canada. From the 1930’s on oil companies and the Alberta government were desperate for investment money and purchasers in Canada for their oil. But the rest of Canada refused, so Alberta received money from US companies instead, and now the rest of Canada has nobody but themselves to blame for the US domination of the Canadian oil business. There was just no way they were going to leave the oil in the ground until the rest of Canada was ready to pay for it.
Bruce
(Spoken like a true angry former oil company employee. Apologies for any ruffled feathers.)
Although it appears that the referenced Eastern Railroad News is available by on-line subscription only, fortunately a quick Google search found several other reports on this movement available for free, such as these:
http://www.kjonline.com/news/oil-crossing-maineby-way-of-railroad_2012-05-29.html and http://www.pressherald.com/news/oil-by-rail-trend-has-potential-for-maine_2012-05-30.html
Note: "Price is driving Irving’s thirst for Bakken oil, Burkhardt said. Irving’s refinery, which has a capacity of 250,000 barrels a day, primarily receives its supply via tankers from Venezuela, the Persian Gulf and the North Sea. However, overseas oil now is roughly $20 a barrel more expensive, so it’s cost-effective to move some of the supply thousands of miles by rail.
“Rail can land oil at Saint John at a better price than by sea,” Burkhardt said." "
7 min. 46 sec. video from May 26, 2012 titled “Chasing a BNSF Crude Oil Test Train on Pan Am District 2” at: http://www.youtube.com/watch?v=ySDIhBczMpw
http://www.easternrailroadnews.com/2012/05/28/mma-gearing-up-for-post-cp-strike-unit-crude-trains/
“Mid-West Unit Crude train to Saint John via Maine” - http://www.railroad.net/forums/viewtopic.php?f=55&t=97324 http://www.railroad.net/forums/viewtopic.php?f=55&t=97324
The main pipeline from Western Canada towards Eastern Canada ends at Sarnia, ON (across from Port Huron, MI) which is a major Petrochemical processing area. There is also a pipeline from Portland, ME to Sarnia via Montreal. Both pipelines bring oil to Sarnia. There has been talk of reversing the Sarnia to Montreal section of the eastern pipeline.
Both BNSF and CP have now run one train each to Irving Oil in St. John’s, NB.
Some of the oil from Canada is sourced from “oil sands” which are on the surface. They use heat from one or another petroleum product to separate the oil from the sand. The price of a barrel of oil has to be high in order for them to make a profit mining it. If for some odd and extremely unlikely reason a barrel of oil on the world market dropped back to what it was in the 80s or 90s the oil sands operations would shut down.
From my 1st linked article above: 2,435 miles over 6 days = average speed of 406 miles per day or 17 miles per hour - less than the average for all types of trains on most railroads ! For a unit train, too !
Where’s John G. Kneiling now that we need him ? (again) For example, doubling the average speed to 35 MPH would enable using only half as many of those expensive new tank cars, at $100 - 120,000 each to purchase new, or $1,200 to $1,500 each per month ($40 to $50 per day) to lease. 52 less cars would be a savings of $2,000 to $2,600 per day, or almost $100 per hour - think that might support a faster speed ?
Paul:
I nominate you for the Professional Iconoclast.
Those were great columns. Sharp man, even sharper pencil.
Ed
Thanks, Ed - but he had the sharpest tongue ! (typewriter) I’ll accept, for the time being, only because there seems to be no one else quite so commercially-oriented ($) that way.
By the way - a link to my source for the tank car prices and rates that I quoted above:
“Oil and gas drive hot leasing market” by Tony Kruglinski, dated Wednesday, June 06, 2012, at: http://www.railwayage.com/index.php/blogs/tony-kruglinski/oil-and-gas-drive-hot-leasing-market.html
See also “What’s lowering railcar rents?” also by Tony Kruglinski, dated Wednesday, May 30, 2012, at: http://www.railwayage.com/index.php/blogs/tony-kruglinski/whats-lowering-railcar-rents.html
The speed of the BNSF Oil Train slowed down greatly once it reached New England. There are 10 mph speed limits in places east of Bangor, ME and they had to change to 4-axle power. Second trains from both BNSF and CP are on the move.
Just found out that the U.S. does not classify oil from Canada as “foreign” they simply class it as domestic oil. I wonder if anyone in Canada realizes this, odd eh?
That was one of the first results of NAFTA. I was peripherally involved in some of that decision process, on the losing side I might add. We couldn’t get enough other Canadians to understand the long term implications of that. Loss of our domestic control of our own oil marketing. Don’t believe for a moment that Provincial governments have adequate controls over their natural resources, or that the Federal government has adequate control over sales to other countries.
Bruce
Why would they have to switch to 4 axle units? Too many curves or bad track?
Locomotive weight and neither GE locomotive had self-steering trucks.
From Railway Age, dated June 8, 2012, at: http://dev01.sbpub.com/railtest15/index.php/mechanical/freight-cars/phillips-66-acquiring-2000-tank-cars.html?channel=Array
"The Phillips 66 Co. is reported to be acquiring 2,000 new tank cars to move oil from North Dakota to Phillips 66 refineries on the Atlantic and Pacific coasts.
The supplier was not specified in a Financial Times report.
The cars are valued at a reported $200 million and will have the capacity to move 120,000 barrels of oil a day."
That last figure is suspect - it implies an average ‘cycle time’ of about 116 days - probably should be 1.2 million instead.
Good news for the railroads, including mine , I wonder how long it will last before the bubble pops? I’m hoping for at least a few good years.
Randy
Randy: See Fred Frailey’s blog, his latest posting, for the outlook on that.
I see Fred and the group talking mostly about movements south and that traffic is predicted to dry up when pipelines are put in use (2015). The East coast refinerys won’t have an impact on me personally except for the St John NB refinery. I don’t forsee a pipeline across Maine in the near future. Like I said , I’d like a couple of good years on the railroad before I pull the pin for the last time.
2nd oil can train for Irving heading east via Pan Am passing through the Hooksac tunnel (N. Adams, Ma.) around 9:30 this morning, 6/13.
PeterMack- Welcome to trains.com! [C):-)]
Thanks to Brian4449, here’s the first sighting of the 2nd unit oil train heading east yesterday morning, 6/13 in western Mass. http://www.youtube.com/watch?v=pNu5cqQ_6EI&list=UUY10Is96Ito7lQi-hVlVIrw&index=1&feature=plcp
Moderator (Darren) Updated for Embedded view