Investor Icahn gets into oil rail market

Sept. 26, 2013 at 8:36 AM
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NEW YORK, Sept. 26 (UPI) -- U.S. investor Carl Icahn said he wanted in on the "secular changes" in oil transport by wading into the U.S. railway systems.

Icahn Enterprises said it created American Railcar Leasing LLC as a "multibillion-dollar" venture that would have a fleet of 32,500 railcars.

Icahn said in a statement Wednesday the railcar business "will continue to benefit from secular changes in the transportation industry driven significantly by increasing crude oil and natural gas production in North America which is increasingly reliant on railcar transportation."

The U.S. Energy Department said the August average crude oil production of 7.6 million barrels per day was the highest monthly level since 1989. The increase in production has strained existing pipeline capacity and the Association of American Railroads has reported steady increases in the amount of crude oil delivered by rail in the United States this year.

BNSF Railway Co. said last month it plans to invest $115 million in rail projects in Montana this year, including the replacement of nearly 100 miles of track. A $220 million investment in North Dakota finances the replacement of about 315 miles of track this year.

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