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More U.S. oil delivered by rail

Feb. 8, 2013 at 6:28 AM   |   Comments

WASHINGTON, Feb. 8 (UPI) -- Petroleum product deliveries by rail in the United States for January were up more than 50 percent compared to the same time last year, a trade group said.

The Association of American Railroads reports that monthly rail traffic for January showed a 54.1 increase for petroleum products year-on-year. Coal deliveries, meanwhile, declined 14.5 percent for January when compared to last year.

AAR Senior Vice President John Gray said the decline for coal and increase for petroleum products was becoming an "old pattern." Railroad companies, he added, are expected to invest $24.5 billion in their systems this year.

"They're making these investments because they are confident that demand for freight transportation, over the long term, will continue to grow," he said in a statement.

New technologies used to extract shale oil and natural gas in the United States has led to a boom that's overwhelmed existing pipeline capacity.

U.S. refiner Phillips 66 in January signed a five-year agreement to deliver crude oil from the Bakken play in North Dakota to a New Jersey refinery by rail.

The U.S. Energy Department said that coal remains the dominant commodity shipped by rail despite the increase in petroleum product freight.

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