As U.S. crude oil production outpaces pipeline capacity, the U.S. is depending more on railroads to move crude oil to refineries and storage centers, although growth in such shipments has slowed recently, according to the U.S. Energy Information Administration, based on data from the Association of American Railroads.
From May to June, the average weekly U.S. rail carloads of crude oil and petroleum products decreased, following a streak of month-over-month increases.
AAR reported that the amount of crude oil and refined petroleum transported by rail totaled nearly 356,000 carloads during the first half of 2013, jumping 48 percent compared with the same period last year. In its latest Rail Time Indicators report, AAR noted that U.S. carloads of petroleum and petroleum products, including crude oil, in June were up 31.7 percent from the level in June 2012, the smallest year-over-year monthly increase for this commodity group in 16 months.
Furthermore, U.S. weekly carloadings of crude oil and petroleum products averaged nearly 13,700 rail tankcars during the first six months of 2013. With one carload equivalent to about 700 barrels, the amount of crude oil and petroleum products shipped by rail was equal to 1.37 million barrels per day during the first half of the year, compared with 927,000 barrels per day during the same period last year. Crude oil accounts for about half of those 2013 daily volumes, according to AAR. Therefore, in 2013, rail moved about 700,000 barrels per day of imported and domestic crude oil, versus the 7.2 million barrels of crude oil the U.S. produces daily.
Despite the overall year-to-date increases, the U.S. Energy Information Administration said that week-to-week, the pace of rail moving crude oil and petroleum products slowed from May to June, driven by a jump in crude oil production from North Dakota, which reduced the incentive to ship oil to coastal refineries, as well as a lack of railcars.
It remains to be seen whether the rail disaster in Quebec that has reignited a debate about the safety of shipping crude oil by rail or pipelines will have a lasting impact on the use of the mode.