Pipeline On Wheels: Trains Are Winning Big Off U.S. Oil Railroads are increasingly becoming the preferred means of shipping the masses of oil being produced in North Dakota and surrounding states. The railroad industry is eager to fill in for the lack of pipeline capacity. But some say the train growth needs to slow down.

Pipeline On Wheels: Trains Are Winning Big Off U.S. Oil

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The U.S. oil boom in North Dakota and elsewhere is also creating a boom for the railroad industry. So far this year, trains have carried 140 million barrels of oil out of North Dakota alone. It's because there just isn't enough pipeline capacity to move all of that product to major markets. Overall, shipments of crude oil by rail are up almost 50 percent over last year.

And as NPR's Kirk Siegler reports, the trend is only expected to grow.

KIRK SIEGLER, BYLINE: To understand the scale and reach of the oil boom in the middle of the country, come to this wind-y mountain pass in Southern California.


SIEGLER: Here, at what's known as the world-famous Tehachapi Loop, watching a train full of oil tanker cars, let's see, one, two, three, four, five, six, seven, eight, nine, 10.


SIEGLER: Standing there with the train rumbling past, it's hard not to think of this as a pipeline on wheels. And the railroads, they love it.

JOHN MILLER: Over the course of the last almost four years, you've seen just a rapid development, which attests to the demand for the oil.

SIEGLER: That's John Miller. He's vice president of industrial sales for Burlington Northern Santa Fe Railroad. He says railroads are in a good position, with tracks by all the major oil fields. And their main competition, pipelines, they take a long time to build. Just think about the stalled Keystone XL.

MILLER: A pipeline, typically speaking, requires commitments and time to put those together and time to get permitting and time to lay the pipe and time to put it all together. And that could take years.

SIEGLER: And the industry doesn't want to wait that long. So far this year, 60 percent of all the oil produced in North Dakota left the state by rail.

CHUCK CLOWDIS: It's amazing when you look at it that way. That's a lot of trains. That's a lot of tanks moving down a lot of track.

SIEGLER: Economist Chuck Clowdis of consulting firm IHS says there's an overwhelming need to move all this oil to market and the railroads have so far proven they're the most efficient. That's when they can find enough rail cars to do the job.

CLOWDIS: Just finding the tankers right now is the biggest challenge.

SIEGLER: Clowdis says they can't build these new tank cars fast enough. There's a backlog of orders in the thousands. And then there's the question of where all that oil is going. Here on the West Coast, there's a big push to build new oil rail terminals and retrofit refineries to handle trains.


SIEGLER: One is proposed at this refinery in Bakersfield. Here, trains could connect with existing pipelines that feed L.A. to the south and the Bay Area to the north. But take Bakersfield. It's a good place to illustrate other challenges that crude by rail faces. Remember that Tehachapi Loop? Freight trains wind and grind around corner after corner as they descend almost 4,000 feet to the valley floor. That loop was an engineering marvel when it was built in 1876. There have been improvements over the years, but there are still bottlenecks and pinch points along the way. And that worries some people that live in the valley.

TOM FRANTZ: Any kind of derailment with a few sparks somewhere and you can have a major disaster up there.

SIEGLER: Tom Frantz is an environmentalist who's worried about the what-ifs up on that pass, especially after a high-profile disaster in Canada this past summer.


SIEGLER: That derailment killed more than 40 people. Then, in November, a crude oil train derailed in Alabama and caught fire. Tom Frantz says this is all the more reason to slow down.

FRANTZ: Are they going to start pushing this crude coming in before they get everything as safe as it needs to be? Are they going to wait for a big accident before they change how they do things on that rail line?

SIEGLER: The railroads are quick to point out that hazmat spills and other accidents are way down in the past 30 years. The slowdown Frantz wants isn't too likely here on the West Coast or across the rest of the country. With states like North Dakota predicted to set another record this year for oil production, you can bet on rail lines shooting for new records of their own. Kirk Siegler, NPR News.

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