Tag Archives: Energy Information Administration (EIA)

KQED: Oil train traffic is down by more than half — for market reasons

Repost from KQED Marketplace

Oil train traffic is down — for market reasons

By Jed Kim, August 24, 2016 | 11:12 AM
At its peak, in October 2014, trains leaving the Bakken region of North Dakota moved more than 29 million barrels. – FREDERIC J. BROWN/AFP/Getty Images

Oil and its downstream products enable most transportation methods, from the gas in automobile tanks to the rubber in shoes. For oil itself, however, there are only a few methods of movement, and each is controversial. In the U.S., one method that saw a recent boom is now on the decline.

Shale oil pumped in recent years from the Bakken region in North Dakota ramped up production and availability faster than pipelines could be built. Trains filled in the gap in the meantime. At its peak, in October 2014, trains moved more than 29 million barrels.

The most recent data from the Energy Information Administration shows that the amount of oil shipped by rail has fallen dramatically since.

“Within the U.S., we’re moving about 12 million barrels in May, and that compares with last May – the intermovements within the U.S. was 26 million barrels,” said Arup Mallik, an industry economist at the Energy Information Administration.

Several factors have contributed to the more-than-half decline in shipments. One is that the price of U.S. oil has risen to more closely match global prices. That has reduced the amount of oil being purchased and shipped to refineries.

Low global oil prices, meanwhile, have stifled production, thus reducing the amount of oil needing to be moved.

While those factors have led to a temporary reduction in the need for crude-by-rail shipping, the completion of additional pipeline infrastructure around the country has made more of a permanent change.

“New pipelines are still getting built, further pushing down the need for crude-by-rail,” said Adam Bedard, CEO of ARB Midstream, a company that invests in pipelines and rail facilities.

Bedard said the biggest impact to crude-by-rail shipments may come later this year, if construction is completed on the Dakota Access Pipeline, which would move oil east into Chicago.

“Those barrels will have to come from somewhere, and it is our view that a lot of those barrels will come from crude by rail,” Bedard said. “The Dakota Access Pipeline can move up to 450,000 barrels a day.”

In May, the total amount of oil moved by trains in the entire U.S. was 470,000 barrels a day.

The future of that pipeline is being decided. Protests have temporarily halted construction of the Dakota Access Pipeline, partly because of concerns for the safety of drinking water.

Safety issues plague perception of crude-by-rail as well. In the past four years, there have been a dozen significant derailments of trains carrying crude oil in the U.S., spilling more than 1.5 million gallons, according to the Federal Railroad Administration.

Brett VandenHeuvel, executive director of Columbia Riverkeeper, said his organization is fighting to reduce or eliminate the traffic traveling through the Pacific Northwest. An oil train derailed in Mosier, Oregon, in June, spilling an undetermined amount of crude.

“We think oil trains are dangerous,” said VandenHeuvel. “We’ve seen explosions very close to our homes here on the Columbia River and have watched explosions and derailments all over the nation, and we think it’s not a safe way to transport oil.”

The overall decline of oil train traffic in the U.S. doesn’t extend to his region, as the network of pipelines on the West Coast is largely isolated from the rest of the country. Trains are necessary. Canada, as well, is expected to see an increase in crude-by-rail because it lacks comparable pipeline infrastructure.

VandenHeuvel said his organization will work to keep more terminals from being constructed that would bring in more rail traffic. He said he’s concerned more will come if oil prices rise again.

“You know, that number could ramp back up as production increases,” VandenHeuvel said.

Jed Kim
Jed Kim is a reporter for the Marketplace Sustainability Desk. He focuses on issues of climate change, conservation, energy and environmental justice.  Prior to joining Marketplace in April 2016, Jed was an environment reporter at KPCC public radio…
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WALL STREET JOURNAL: The New Oil-Storage Space: Railcars

Repost from the Wall Street Journal

The New Oil-Storage Space: Railcars

U.S. market is so oversupplied with oil that traders are experimenting with a new place for storing excess crude
By Nicole Friedman and Bob Tita, Feb. 28, 2016 9:09 p.m. ET
Rail tanker cars sat on tracks at the Red River Supply Inc. rail yard in Williston, N.D., in February 2015.
Rail tanker cars sat on tracks at the Red River Supply Inc. rail yard in Williston, N.D., in February 2015. PHOTO: DANIEL ACKER/BLOOMBERG NEWS

The U.S. is so awash in crude oil that traders are experimenting with new places to store it: empty railcars.

Thousands of railcars ordered up to transport oil are now sitting idle because current ultralow crude prices have made shipping by train unprofitable. Meanwhile, traditional storage tanks are running out of room as U.S. oil inventories swell to their highest level since the 1930s.

Some industry participants are calling the new practice “rolling storage”—a landlocked spin on the “floating storage” producers use to hold crude on giant oil tankers when inventories run high.

The combination of cheap oil and surplus railcars has created a budding new side business for traders. J.P. Fjeld-Hansen, a managing director for trading company Musket Corp., tested using railcars for storage last year and found he could profit by putting the oil aside while locking in a higher price to deliver it in a later month.

The company built a rail terminal in Windsor, Colo., in 2012 to load oil shipments during a boom in U.S. oil production. Now, Mr. Fjeld-Hansen says, “The focus has shifted from a loading terminal to an oil-storage and railcar-storage business.”

Energy Midstream, a trading company based in The Woodlands, Texas, stored an ultralight oil known as condensate on Ohio railcars last month for about 15 days before shipping it to a buyer in Canada.

Dennis Hoskins, a managing partner at Energy Midstream, says there are so many unused tank cars that he is constantly hearing from railcar owners hoping to put them to use. “We get offers everyday for railcars,” he said.

The use of railcars for storage could be limited by the cost of track space and safety and liability concerns that have followed a string of high-profile transport accidents. Issues range from leaky cars to the risk of collisions and fires.

Federal regulations require railroads that store cars loaded with hazardous materials like oil to comply with strict storage and security measures to keep the cars away from daily rail traffic. Railroads and users face responsibility for leaks, collisions or other mishaps.

“I don’t want the liability,” said Judy Petry, president of Oklahoma rail operator Farmrail System Inc. “We prefer not to hold a loaded car.”

Still, the oil has to go somewhere. The surge in shale-oil production has created a massive glut that the industry is struggling to absorb. BP PLC Chief Executive Bob Dudley joked in a speech this month that by midyear, “every storage tank and swimming pool in the world will be filled with oil.”

Khory Ramage, president of Ironhorse Permian Basin LLC, which operates a rail terminal in Artesia, N.M., said he hears regularly from traders looking to store crude in his railcars.

Crude-storage costs “have been accelerating, just due to the demand for it and less room,” he said. “You’ll probably start seeing this kick up more and more.”

U.S. crude inventories rose above 500 million barrels in late January for the first time since 1930, according to the Energy Information Administration.

The cheapest form of storage—underground salt caverns—can cost 25 cents a barrel each month, while storing crude on railcars costs about 50 cents a barrel and floating storage can cost 75 cents or more. The cost estimates don’t include loading and transportation.

Railcars hold between 500 and 700 barrels of oil, less than a cavern, tank or ship can store.

The use of U.S. railcars to transport large volumes of oil picked up steam a few years ago as a byproduct of the fracking boom. Fields sprung up faster than pipelines could be laid, so producers improvised and shipped their output to market by rail. Companies soon realized railroads offered greater flexibility to transfer oil to whomever offered the best price. Some pipeline companies even joined the rail business, building terminals to load and unload oil. U.S. oil settled Friday at $32.78 a barrel, down nearly 70% from mid-2014.

The plunge in oil prices brought that activity to a halt. Analysts estimate there are now as many as 20,000 tank cars—about one-third of the North American fleet for hauling oil—parked out of the way in storage yards or along unused stretches of tracks in rural areas.

Producers and shippers who signed long-term leases for the cars during the boom are stuck paying monthly rates that typically run $1,500 to $1,700 per car. Traders can pay those prices and still profit. Oil bought at the April price and sold through the futures market for delivery a year later could net a trader $8.07 a barrel, not including storage or transportation costs.

As central storage hubs fill up, oil companies are more willing to pay for expensive and remote types of storage, said Ernie Barsamian, principal of the Tank Tiger, which keeps a database of companies looking to buy and sell oil storage space.

The Tank Tiger posted an inquiry Wednesday on behalf of a client seeking 75,000 barrels of crude-oil storage or space to park 100 to 120 railcars loaded with crude.

Mr. Barsamian likened the disappearance of available storage to a coloring book where nearly all the white space has been filled in.

“You’re getting closer to the edges,” he said.

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Energy-related CO2 emissions decreased in nearly every state from 2005 to 2013

Repost from the U.S. Energy Information Administration

Energy-related carbon dioxide emissions decreased in nearly every state from 2005 to 2013

November 23, 2015, Principal contributor: Perry Lindstrom
graph of per-capita energy-related carbon dioxide emissions by state, as explained in the article text
Source: U.S. Energy Information Administration, Energy-Related Carbon Dioxide Emissions at the State Level, 2000-13.   Note: Click to see information for all states.

The United States has a diverse energy landscape that is reflected in differences in state-level emissions profiles. Since 2005, energy-related carbon dioxide (CO2) emissions fell in 48 states (including the District of Columbia) and rose in 3 states. EIA’s latest analysis of state-level energy-related CO2 emissions includes data in both absolute and per capita terms, including details by fuel and by sector.

This analysis measures emissions released at the location where fossil fuels are consumed. Therefore, to the extent that fuels are used in one state to generate electricity that is consumed in another state, emissions are attributed to the former rather than the latter. An analysis attributing emissions to the consumption of electricity, rather than to the production of electricity, would yield different results.

map of changes in proved reserves by state/area, as explained in the article text
Source: U.S. Energy Information Administration, Energy-Related Carbon Dioxide Emissions at the State Level, 2000-13.   Note: Click to see information for all states.

The 10 states with the highest levels of energy-related CO2 emissions in 2013 accounted for half of the U.S. total. These 10 states also have large populations and account for slightly more than half (53%) of the nation’s total population. California was the second-highest emitter in absolute terms (353 million metric tons of carbon dioxide, or MMmt CO2), behind only Texas (641 MMmt CO2). But California was also the fourth-lowest emitter on a per capita basis, behind the District of Columbia, New York, and Vermont. Relatively small states such as Wyoming and North Dakota had much higher levels of per capita emissions in 2013, nearly seven times and five times the national average, respectively.

Energy-related CO2 emissions come from coal, petroleum, and natural gas consumed within a state to produce electricity (38% of U.S. total), to transport goods or people (33%), to operate industrial processes (18%), or to directly fuel equipment in residential and commercial buildings (10%). The consumption levels by fuel and by sector vary considerably by state. For example, coal consumption accounted for 78% of energy-related CO2 emissions in West Virginia in 2013, while coal only accounted for 1% of emissions in California.

Consumption of petroleum accounted for more than 90% of energy-related CO2 emissions in two states, Hawaii and Vermont, but for different reasons. In both states, emissions from the transportation sector accounted for more than 50% of energy-related emissions. In Vermont, the nonelectric (or direct) residential share of total emissions was 23%, mostly from petroleum-based fuels such as heating oil used to fuel furnaces and water heaters. Vermont’s electric power sector share of emissions from petroleum was only 0.2%, as very little of the state’s electricity in 2013 was generated from petroleum or any other fossil fuels. Hawaii, on the other hand, has very little direct use of petroleum for residential heating but much higher use of petroleum for power generation.

More information about each state’s energy-related CO2 emissions is available in EIA’s report, Energy-Related Carbon Dioxide Emissions at the State Level, 2000-13.

Principal contributor: Perry Lindstrom
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