![]() They include the Bakken Oil Express, a complex of four long loops of rail. "There is not a mad rush yet to build new pipelines," Broughton said.Īs a result, companies have made massive investments in oil-related rail infrastructure in the past three years, including a dozen oil-loading terminals that serve the Bakken alone. In any case, the petroleum industry doesn't have 100-plus years of experience to estimate the yield of these unconventional wells, as it does with traditional wells. Some analysts are pessimistic, warning of a rapid decline after the initial gush of oil others believe shale can be fractured repeatedly, with numerous close wells guaranteeing years of production. (Related Interactive: Breaking Fuel From Rock) Meanwhile, it's unclear how long the new hydraulic-fracturing technology, known as fracking, will work on these new shale-oil fields, Broughton said. But pipelines are expensive to build and can require decades of production to justify their cost to financiers. ![]() They remain the cheapest and easiest way to move oil over land, said Donald Broughton, a stock analyst at Avondale Partners. Pipelines would be the obvious choice for transporting oil from landlocked North Dakota. shale-oil prospects are far from the sea. When oil production shifted to Texas and Oklahoma, pipelines rapidly connected the new production hub to the rest of the country.Īs oil development spread around the world, huge crude tanker ships became an integral part of the system for delivering petroleum. Rockefeller soon gained a stake in that inaugural pipeline, and hastily built his own web of conduits from the nation's first oil region. But ever since the first successful oil pipeline was built in Pennsylvania in 1879-an effort by Rockefeller's competitors to break his monopoly-it became clear that pipes were a cheaper and quicker way to transport oil. Rockefeller build his Standard Oil empire at the dawn of the petroleum age. to Overtake Saudi Arabia, Russia as World's Top Energy Producer") on track to lead the world in oil production within five years. Indeed, oil trains-a throwback to the earliest days of the petroleum industry-have become key to exploiting the North American oil boom, which has the U.S. With few nearby pipelines, drillers flush with petroleum turned first to expensive trucks, then to trains as they sought to move their product to market. A new combination of drilling and extraction technologies has oil gushing from out-of-the-way fields from South Texas to Alberta, Canada. More surprising is that shipping by rail, which is costlier than pipeline transport and raises new environmental concerns, may become a fixture of the industry and not just a temporary fix, analysts say.Īnd it's not just North Dakota that's becoming an oil-train hub. That might be expected until more pipelines can be built. A large share of that traffic starts in North Dakota, where more oil is being transported by rail than by pipeline. railroads have seen the number of cars filled with petroleum products jump 44 percent in the past year. "Rail is cool again," said Rusty Braziel, an energy analyst at RBN Energy. (See related photos: " Bakken Shale Oil Boom Transforms North Dakota") But all that oil would be stuck in the Midwest without trains. ![]() It's thanks to fracking-the extraction of oil from the state's Bakken Shale formation. North Dakota surpassed Alaska this year as the number two oil-producing state.
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