Phillips 66, formerly a division of energy giant ConocoPhillips, recently filed a project proposal to bring mile-long crude oil trains from Canada and North Dakota to its refinery in California’s San Luis Obispo County. If approved, the project would mean up to 250 trains a year will each haul 2 million gallons of crude oil into California and travel on the same tracks used for Amtrak commuter railtrains in the San Francisco Bay Area. With oil fracking increasing America’s domestic production by 60% in the last three years, political delays in building the Keystone XL Pipeline resulted in California having the only refining capacity available in America. But a with horrible safety record, a political battle will heat up in California over oil trains.
America oil production since 2008 is up by about 60% to 2.7 billion barrels a year.In 2013, total U.S. crude oil production grew by 15% to 7.4 million barrels per day as fracking of underground shale formations in the Eagle Ford field of Texas and Bakken in North Dakota allowed both of those states to grow production by 29% for the year. In three years, output grew in North Dakota by 177% and in Texas by 119%.
Railroads have been making fortunes carrying North Dakota crude oil from the Bakken field at an average of $17 a barrel of crude oil to Texas refineries versus an estimated $10 a barrel if the Keystone XL Pipeline had been built. The key beneficiary of this bonanza has been Warren Buffet’s Berkshire Hathaway Corporation that purchased the Burlington Northern Railway (BNI) in 2009. It had been assumed that by 2012 most of that crude oil would be shipped through the Keystone XL Pipeline. But since Burlington’s purchase, BNI’s profits have grown by 30% a year to a record $2.37 billion in 2013. Goldman Sachs recently reported that with existing oil pipelines fully congested, 200,000 more barrels will be shipped by rail and now oil trains are headed to California.
Read more: http://www.americanthinker.com/blog/2014/04/oil_trains_start_rumbling_into_california.html