All
Suppliers
Products
CAD Models
Diverse Suppliers
Insights
By Category, Company or Brand
All Regions
Alabama
Alaska
Alberta
Arizona
Arkansas
British Columbia
California - Northern
California - Southern
Colorado
Connecticut
Delaware
District of Columbia
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Manitoba
Maryland
Massachusetts - Eastern
Massachusetts - Western
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Brunswick
New Hampshire
New Jersey - Northern
New Jersey - Southern
New Mexico
New York - Metro
New York - Upstate
Newfoundland & Labrador
North Carolina
North Dakota
Northwest Territories
Nova Scotia
Nunavut
Ohio - Northern
Ohio - Southern
Oklahoma
Ontario
Oregon
Pennsylvania - Eastern
Pennsylvania - Western
Prince Edward Island
Puerto Rico
Quebec
Rhode Island
Saskatchewan
South Carolina
South Dakota
Tennessee
Texas - North
Texas - South
Utah
Vermont
Virgin Islands
Virginia
Washington
West Virginia
Wisconsin
Wyoming
Yukon

Pipeline Issues Result in Surging Rail Use

Jeff Reinke
1/27/2019 | 5 min read
Subscribe
Pipeline Issues Result in Surging Rail Use

Canadian crude oil production recently began to outpace access to pipelines. The increase in oil, combined with leaks and halted pipeline construction, has led exporters to use rail more frequently as a way to transport oil to the U.S.

According to a report from the Energy Information Administration (EIA), several pipeline projects, including those running to the United States and others across Canada to Atlantic and Pacific ports, have either been canceled or significantly delayed. Among the projects impacted is the 590,000 barrels/day Keystone pipeline which is currently running at only 80 percent capacity due to a November leak.

The highest area of demand for Canadian oil is ironically the area producing the most oil within the domestic U.S. – the Gulf Coast. The demand is because refineries in this area are designed to handle oil classified as heavy crude oil, which is what is coming from north of the border. Traditional suppliers from Venezuela and Mexico have experienced production declines that have resulted in lower exports, making Canada an increasingly important source of heavy crude oil.

In January, the U.S. Gulf Coast imported more crude oil from Canada (448,000 b/d) than from Venezuela (438,000 b/d) for the first time on record. The influx of Canadian crude by rail, which set a record last December when it topped 203,000 b/d, has also driven prices down. And while U.S. crude oil by rail imports from Canada fell to 129,000 b/d in January 2018, year-over-year volumes remain higher.

Next Up in Supply Chain
Bridge Collapse Reverberates Throughout Supply Chain
Show More in Supply Chain