President Trump plans to sign executive orders reviving the Keystone XL and Dakota Access pipelines, which had been stalled under the Obama administration, sources tell Fox News.
The moves had been widely expected, as Trump blasted his predecessor for effectively blocking the projects amid environmental and other concerns.
http://www.fox9.com/news/231379797-story
As expected, federal government policy on the pipeline has been reversed.
Will this pipeline have any impact on the railroads?
Should have little or no effect on the railroads since it coming out of Alberta, Canada bringing their shale oil into the US, not the Baaken oil fields of Montana and Wyoming.
The origin of the Keystone crude is the Canadian oil sands in Alberta. However, a second pipeline project -- Dakota Access -- also was approved. This pipeline's intended cargo is the Bakken crude from North Dakota. Bakken is the oil that has been the cause of congestion problem with trains on the BNSF. Although train volume from the Bakken already is down somewhat from a couple of years ago, I believe completion of this line will further moderate demand for train transport.
The Keystone XL pipeline was an international pipeline held up by former Pres. Obama, and also had provisions for some limted takeaway from the Bakken. The Dakota Access PL, on the other hand, was a previously approved domestic pipeline, that suddenly got put on hold by the Corps of Engineers apparently because of issues brought up by the local native tribe. As pointed out, DAPL would further stress CBR, especially to the Gulf Coast.
Pres. Trump wants to re-negotiate terms of Keystone, demanding more American steel pipe used, etc. The oil picture has changed in the years that the project was held up, and WSJ had an article today titled "Do we still need the Keystone Pipeline?" Unfortunatly I don't subscribe, so if someone does, could you give a synopsis. An oil sands dilbit pipeline would also bring much dilutant in the form of condensate with it, and the Gulf Coast is already awash in shale oil condensate. Rail wold reduce or eliminate the dilutant. Also Canada has approved a new pipeline twin to an existing PL to the Pacific.
The Dakota Access Pipeline is 90% complete already, I think they are just waiting for approval to bury the line under the lake (see illustration on link below):
https://daplpipelinefacts.com/
Dakota Access Pipeline terminates in Southern Illinois. I have not seen any maps that show the DAPL junctioning with pipelines to the Gulf Coast.
Here is one link though that shows a potential link to the Gulf:
http://www.ogfj.com/articles/2014/03/once-twice-three-times-a-pipeline-the-dakota-access-bakken-crude-gateway-to-the-gulf.html
Keystone XL Pipeline would junction with an existing pipeline that flows to Houston and refineries near there.
Pretty sure the refineries in Houston do not have enough capacity to handle refinement of all the Baaken Crude and I think they are still going to use rail to distribute the Oil to other refineries and ports around the country.
CMStPnP The Dakota Access Pipeline is 90% complete already, I think they are just waiting for approval to bury the line under the lake (see illustration on link below): https://daplpipelinefacts.com/ Dakota Access Pipeline terminates in Southern Illinois. I have not seen any maps that show the DAPL junctioning with pipelines to the Gulf Coast. Here is one link though that shows a potential link to the Gulf: http://www.ogfj.com/articles/2014/03/once-twice-three-times-a-pipeline-the-dakota-access-bakken-crude-gateway-to-the-gulf.html Keystone XL Pipeline would junction with an existing pipeline that flows to Houston and refineries near there. Pretty sure the refineries in Houston do not have enough capacity to handle refinement of all the Baaken Crude and I think they are still going to use rail to distribute the Oil to other refineries and ports around the country.
The Dakota Access PL ends at Patoka, Illinois, which is a crude oil pipeline hub. DAPL will be the 8th line into the hub. Your second link reminded me of the pipeline reversal to bring crude to the Gulf Coast.
Any oversupply of crude to the Gulf Coast could be tankered to the east coast, or offshore since congress has reversed the ban on crude oil exports. I think some Bakken CBR would still go to the Pacific Coast refineries, although as pointed out in another thread, an RBN article gives some reasons why even that may be threatened by DAPL.
Most of the pipe and perhaps other items required for construction will be hauled by rail. This will be a traffic boost for the carriers. Another way to look at this is the traffic involved. I'd rather see a non dangerous unit train of pipe compared to a unit train of crude oil that can go boom in the night. Less haz mat issues also which makes work easier
These pipelines will lower the delivered cost of crude to the refineries from the sources, thereby making the source - be it Alberta or Bakken - more market competitive and thereby probably better able to stay in production to a lower price per barrel point when prices fluctuate lower. That translates in to more North American energy security via more self-subsistence.
Oil transport by rail will likely trend down to a niche market - probably never 0 but never back to "boom times" of a few years back.
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