Trains Top 10 stories: No. 7, Crude oil

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An eastbound train loaded with crude oil passes Eola, Ill., on BNSF Railway in March 2014.
Laurence Pearlman
For the past couple years railroads have been riding high on the domestic oil boom that has been filling the mainlines with tank cars. Now shipments of crude oil have started to slow down with lower prices for barrels of crude.

According to the Association of American Railroads, carloads of petroleum products reached a peak of more than 16,000 cars in October 2014. Now shipments have slowly fallen to just under 13,000 in November 2015.

Railroads and car suppliers expected the slowdown of shipments of crude oil after energy companies said they would scale back operations. Tank car leaser GATX Corp.’s President Brian Kenney said in a press release in November that his company had to lock in long term leases.

“Looking longer-term, the growing over-supply of tank cars is decreasing tank car renewal rates and making it more difficult to place new tank cars delivering in 2016.”
With oil shipments decreasing comes the slowing demand for railroads to ship materials used in the fracking process.

“Frac sand is going to fall off very quickly,” said Taylor Robinson, president of PLG Consulting, to Bloomberg News in March. “Nobody knew how fast they could shut down and it looks like they’re pretty fast.”

For the last 10 (business) days of the year, Trains editors will present the Top 10 stories of the year in reverse order starting Dec. 16 and finishing on Dec. 31.

NEWSWIRETrains News Wire

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