With Dakota Access in limbo, more Bakken crude to move on trains
http://www.reuters.com/article/us-north-dakota-pipeline-rail-idUSKBN13V2ICAs oil prices recover and U.S. shale production picks up, energy companies that had planned to ship crude on the Dakota Access Pipeline will turn to rail, a transport method that poses its own risks to the environment and local communities.
Sunday's decision by U.S. Army Corps of Engineers to deny Energy Transfer Partners an easement to complete the line means shippers who expected to see another 570,000 barrels of daily Bakken pipeline capacity in 2017 will have to find new ways to move supply.
Rail comprises nearly 65 percent of total crude export capacity in the Bakken, but is currently underutilized because it is more costly and less efficient. In September, only 29 percent of total Bakken oil production moved by rail, according to the latest figures from the North Dakota Pipeline Authority.
"Once the pipes are full, that means more trains. And without DAPL, the pipes get full sooner than they otherwise would have," said Rick Smead, managing director of advisory services for RBN Energy, noting that this scenario is contingent on a big rise in production.
A rise in incidents during the shale boom, and high-profile accidents, such as the explosion in 2013 that killed 47 people in Lac-Megantic, Quebec, has drawn increased scrutiny to the rail industry, prompting the U.S. government to enact more stringent regulations for rail movements...
