Petroleum drives U.S. rail increases

April 5, 2013 at 7:08 AM   |   Comments

WASHINGTON, April 5 (UPI) -- Petroleum products continue to make gains in U.S. rail traffic though overall traffic was down, the Association of American Railroads said.

AAR reported that carloads in March were down 0.5 percent to 1.1 million compared to the same time last year. The decline, however, was the lowest in more than a year.

"U.S. rail traffic continues to mirror the overall economy: not great, not terrible, anticipating a better future," AAR Senior Vice President John Gray said.

Petroleum and petroleum product deliveries by rail were up 54.3 percent year-on-year to 19,295 carloads in March.

Regional oil companies are turning more to rail deliveries as the U.S. oil boom strains existing pipeline capacity. Texas energy company Indigo Resources this week announced plans to build a rail-to-barge terminal on the Mississippi River that will have storage capacity of 2 million barrels.

The terminal "will help alleviate current infrastructure constraints impacting the transportation of crude oil and other petroleum products produced in Canada and the Bakken shale formation of North Dakota," the company said.

A U.S. federal review of the planned Keystone XL pipeline said rail must be considered when weighing the project's national interest.

A train derailment in Minnesota last week spilled around 350 barrels of oil.

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