Crude-by-rail service brings Bakken oil to coastal markets Aerial view of the entire Berthold, North Dakota facility including storage tanks, rail loop and loading building, pumps and equipment. Image courtesy of Enbridge.
By Lisa Fattori
With oil production reaching record levels in the Bakken, oil producers, logistics specialists, railway companies and pipeline companies are all looking to increase capacity to get product to market. Crude-by-rail service has been quick to respond to the Bakken boom and is an essential transportation solution – not just in the interim, but long-term. Even with the ongoing rollout of pipeline infrastructure, rail service offers flexibility and access to markets unreachable by pipeline and is a proven transportation option that is here to stay. By the end of 2012, North Dakota Bakken oil production was close to 770,000 barrels per day (bpd) of crude. According to the North Dakota Pipeline Authority, in December 2012, oil transportation by rail in the Williston Basin was 64 percent, while pipeline export accounted for only 27 percent of oil produced. As production increases to $1 million bpd in the next few years, by some estimations, rail’s takeaway capacity is expected to keep pace with the growth. 68
BAKKEN OIL REPORT – SPRING 2013
BNSF Railway Company connects to 16 of the top 19 oil-producing counties in North Dakota, and five of the top six in Montana, with 1,000 miles of rail line in the Williston Basin. In December 2009, the first 100-car unit-train of crude oil traveled from North Dakota to Oklahoma and today, Berthold Rail Facility in Berthold, North Dakota. Image of the Phase 2 rail BNSF handles approximately loading building which will deliver crude directly from pipeline to rail. seven unit-trains per day out Image courtesy of Enbridge. of the Bakken. Recently, the next to Class 1 rail lines, particularly company announced a 2013 in North Dakota. While infrastructure investment program of $4.1 billion to be continues to expand, demand for used for upgrades to the company’s core Bakken crude by East and West Coast network; locomotion, freight car and other refineries has shifted attention to the equipment acquisitions; and expansion development of transportation routes and efficiency projects to accommodate to these new markets. Interest in the growth in Bakken oil production. BNSF is Cushing, Oklahoma and St. James, currently moving over 500,000 bpd and Louisiana destinations is waning, in favor has the capacity to accommodate one of refineries that have been reliant on million barrels out of the Williston Basin. foreign crude and are eager to capture In the past few years, Bakken oil better pricing per barrel by purchasing stakeholders have focused on the buildBakken oil. out of terminals and transload facilities