Fracking Is A Game Changer For America's Railroaders

Burlington Northern train

Photo: Bossco

Reuters’ John Kemp writes fracking for shale oil in North Dakota’s Bakken formation has provided a much-needed jolt to railroad activity — which has been hit by fracking for natural gas in other parts of the country.At the same time, power stations’ switching to natural gas has caused a sharp decline in coal rail shipments, which comprise a huge chunk of their freight.

In the third week of September, railcar coal loadings were 17 per cent below prior-year levels, Kemp writes. Class I railroads loaded 116,000 freight cars with coal in the week ending September 29, compared with 141,000 in the same week last year.

That drop-off has been cushioned by oil. Loadings of petroleum and products in the most recent week are up 59 per cent year on year, from 7,371 in 2011 to 11,749 in 2012, he says.

The main winner? Burlington Northern Santa Fe, which controls most rail in and out of North Dakota. Kemp writes:

BNSF’s petroleum loadings doubled to 8,156 in the most recent week, from 4,131 last year. BNSF accounts for 70 per cent of all oil loadings, and essentially all of the growth in oil by rail over the last 12 months.

The company announced last month that it has increased its capacity to enable the railroad to haul 1 million barrels per day out of the Williston Basin.

Creative destruction unfolds before us.

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