Rail deliveries of crude oil increasing

March 19, 2013 at 6:09 AM

HOUSTON, March 19 (UPI) -- Crude oil transport by rail in the United States is expected to hit the 700,000 barrel-per-day mark by the end of the year, said BNSF head Matthew Rose.

The Association of American Railroads reports that U.S. weekly carloads of petroleum products increased 46.5 percent for the week ending March 9 year-on-year. Much of that increase is fed by oil production in North Dakota, where output has surpassed existing pipeline capacity.

Rose, BNSF chief executive officer, told energy news website Rigzone that rail delivery from the Bakken play in the Northern Plains is increasing along with the oil boom.

"We have garnered a lot of attention lately on our crude by rail, hauling about 525,000 barrels a day of crude oil, and we expect to be hauling about 700,000 barrels a day by the end of this year," he said.

It's more expensive to ship crude oil by rail, though shipment time is less. Credit Suisse in February said it takes about 90 hours round trip for Bakken oil to reach southern U.S. refineries versus 40 days by pipeline, Rigzone reports.

A U.S. State Department review of Keystone XL said rail infrastructure should be considering when weighing the national interest of the pipeline planned from Canada.

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