Does the increase in diesel fuel price increase rail's competitiveness?
Do any of the railroads have ownership of a refinery and/or oil producing land?
The answer to question one is "Maybe, maybe not." I realize that's no answer but the thing is rising diesel fuel prices are going to effect the railroads too. However what railroads pay for diesel fuel always has seemed to be a mystery.
Question two? I have no idea. I don't think so, unless it's in an oblique way such as "Railroad X is owned by Company Y who also owns Oil Company Z."
Flintlock76The answer to question one is "Maybe, maybe not." I realize that's no answer but the thing is rising diesel fuel prices are going to effect the railroads too. However what railroads pay for diesel fuel always has seemed to be a mystery. Question two? I have no idea. I don't think so, unless it's in an oblique way such as "Railroad X is owned by Company Y who also owns Oil Company Z."
To the greatest extent possible, Class 1 railroads play the futures markets for purchase of bulk quantities of fuel. When necessary the make 'local' purchases of fuel if the locomotives of a individual train are situated where they can't make the next company fuel depot without running dry.
Don't know about today, when I was still working, Engineers upon taking charge of a train were to report the fuel status of each of their locomotives to the Train Dispatcher, who would see that 'low fuel' situation were reported to Locomotive Management - who would put together a plan for fueling. That plan would take into consideration such things as local price and if state taxes were a part of the local price. Engineers were also required to report when locomotives in their charge dropped below 1000 gallons of fuel on board while they were in route.
Never too old to have a happy childhood!
The railroads are, of course, major users of Diesel fuel. As such, they have tremendous leverage when dealing with suppliers.
They're still subject to market forces, but their price per gallon is going to be substantially lower than retail. The same is likely true with the big trucking firms.
Those who will be hurt most will be the "little guys," both rail and trucking.
Larry Resident Microferroequinologist (at least at my house) Everyone goes home; Safety begins with you My Opinion. Standard Disclaimers Apply. No Expiration Date Come ride the rails with me! There's one thing about humility - the moment you think you've got it, you've lost it...
I thought that railroads arranged long-term locked-in contracts for fuel, with a variety of sources to protect against 'surprises' if one of them failed or encountered 'market difficulties'.
Even if a gallon of fuel 'goes further' for a train than for the equivalent number of trucks, I expect the good old fuel surcharges level the playing field within days or hours of Putin's or whoever's latest machination to raise pump prices.
Delta Airlines bought their own refinery in 2012 and now probably wishes they hadn't. Last I heard, they were looking for a buyer or a partner.
OvermodI thought that railroads arranged long-term locked-in contracts for fuel, with a variety of sources to protect against 'surprises' if one of them failed or encountered 'market difficulties'. Even if a gallon of fuel 'goes further' for a train than for the equivalent number of trucks, I expect the good old fuel surcharges level the playing field within days or hours of Putin's or whoever's latest machination to raise pump prices.
Just hope none of the Class 1's 'futures contracts' was for Russian oil. Railroads have been using virtually all financial and market means to lock in the least cost fuel possible.
GrampDo any of the railroads have ownership of a refinery and/or oil producing land?
Railroads owned a lot of land, especially in the west. They would often have mineral rights under their land, and they may have severed and kept the mineral rights under land they sold. They could develope the oil on their own (BN had an oil company) or lease out the mineral rights to oil developers and collect royalties.
Don't know how the testing of natural gas as a fuel for locomotives is going, but the first major renewable natural gas plant has opened outside of Nevada, Ia along UP. (Pronounced Nevayda). Uses crop waste as its resource. Ethanol is also produced there with other products to come. The gas produced is being pumped into an Alliant Energy pipeline. I realize it's going to go to where the best price can be had. Just kinda wish it could go into UP locomotives, even maybe by wire, never to need anti-American energy producers. https://www.verbio.us/project/verbio-nevada-biorefinery/https://bioenergyinternational.com/grand-opening-of-verbio-nevada-biorefinery-held/
BaltACD Don't know about today, when I was still working, Engineers upon taking charge of a train were to report the fuel status of each of their locomotives to the Train Dispatcher, who would see that 'low fuel' situation were reported to Locomotive Management - who would put together a plan for fueling. That plan would take into consideration such things as local price and if state taxes were a part of the local price. Engineers were also required to report when locomotives in their charge dropped below 1000 gallons of fuel on board while they were in route.
We have instructions to report fuel below 2000 gallons. I've noticed a lack of communications. Most of our runs cover two dispatcher territories. I've reported fuel levels to the first dispatcher. Then when changing over to the next dispatcher, I'll report the current level. They usually don't know anything about needing fuel.
With some of the newest engines, it's possible for dispatchers (and others) to "remote in" to see fuel status.
Most of our refueling of through trains is done by truck. There are some places where fuel vendors aren't available. Something about not getting paid in a timely manner when previously doing business.
Jeff
All our high horsepower units have WiTronix, and pretty much anyone with supervisor computer access can look up plenty of info about any train or unit, including fuel levels. The dispatchers still often ask us to check though.
Most newer units only have a sight glass near the top of the tank, it won't show any level under about 3000 gallons, so if the electronic display is B/O (a surprisingly common occurrence) there is no way to tell how much is in there.
Also, just because they have access to information does not mean they will use it. There have been a number of cases where units ran dry somewhere out on the road, one memorable case involved a single unit local switcher dying just after entering a short single track section between two long stretches of double track. In this case the crew had reported the low fuel level to the trainmaster the previous day and had been assured it would be refuelled, and I guess they forgot to double check. They ended up getting pushed back to the yard by a priority intermodal train.
It was like watching Gordon and the express push a puffed out Percy back to the shed........
Greetings from Alberta
-an Articulate Malcontent
Backshop Delta Airlines bought their own refinery in 2012 and now probably wishes they hadn't. Last I heard, they were looking for a buyer or a partner.
Not surprised. Buying into a business isn't a good idea unless you understand how it works. An old boss of mine often recieved tips from friends about businesses to buy into but he always refused, because he didn't understand them the way he understood his own.
Delta most likely found out owning a refinery wasn't the advantage they thought it was going to be.
You still have to buy your crude feedstock from producers, and have it transported by pipeline. While you have the fuel for the airports near the Philidelphia refinery, what good does that do for your airports scattered around the world. Refineries are generally located in their own marketshed.
Many decades ago we learned about monopolies. Horizontal monopolies were busted up so ONE company could not own say ALL the car factories. Now I am old and foggy, but I seem to recall that vertical monopolies were also forbidden. SO say a steel company couldn't also own the ore fields and the coal mines. Something like that.
Am I just loopy, or did that exist. If so where/when did it go?
Standard Oil was a horizontal monopoly, owning most of the refining capacity. In 1911 they were broken up into 11(?) companies. Some of them have merged back together again: Exxon (Standard Oil New Jersy) and Mobil (Standard Oil Co of New York/SOCONY)
MidlandMikehorizontal monopoly
The first thing that sprung to my mind was the big movie studios that once owned their own network of theaters. They were ordered to divest those holdings I think in the 1950's.
Enzoamps Many decades ago we learned about monopolies. Horizontal monopolies were busted up so ONE company could not own say ALL the car factories. Now I am old and foggy, but I seem to recall that vertical monopolies were also forbidden. SO say a steel company couldn't also own the ore fields and the coal mines. Something like that. Am I just loopy, or did that exist. If so where/when did it go?
Flintlock76 MidlandMike horizontal monopoly The first thing that sprung to my mind was the big movie studios that once owned their own network of theaters. They were ordered to divest those holdings I think in the 1950's.
MidlandMike horizontal monopoly
And these days for a variety of reasons - movie theaters are rapidly dying. Covid being the most recent excuse, but that is just one of many over the years.
BaltACDAnd these days for a variety of reasons - movie theaters are rapidly dying. Covid being the most recent excuse, but that is just one of many over the years.
Theaters around here have started selling alcohol, and some even offer delivery of food and beveragees right to your seat...
It's still a reach, though. With the wide flat screens, streaming, and sound systems now available, many folks would prefer to sit in the comfort of their own home and avoid those people sitting two rows ahead having a loud conversation throughout the movie...
IMO some movies just need that theater experience.
Although I do like to go a weekday the week or 2 after premier. Sometimes you can get an unofficial private showing. I do enjoy the pre-purchased, assigned stadium seating of the current theaters, though.
It's been fun. But it isn't much fun anymore. Signing off for now.
The opinions expressed here represent my own and not those of my employer, any other railroad, company, or person.t fun any
zugmannIMO some movies just need that theater experience. Although I do like to go a weekday the week or 2 after premier. Sometimes you can get an unofficial private showing. I do enjoy the pre-purchased, assigned stadium seating of the current theaters, though.
There are some - but they are few and far between.
Recall 'Cast Away' in 2000 with Tom Hanks and the plane crash scene - at a theater with surround sound cranked up to 11 it made you FEEL the scene.
When I was in Jacksonville there was a local $1 theater - I would go on a off night if something way playing that caught my interest. It closed about 2005. Just before Covid hit I went to a theater in the county seat for 'Ford vs. Ferrari'. Covid closed it and I don't know if it has reopened yet.
BaltACD Flintlock76 MidlandMike horizontal monopoly The first thing that sprung to my mind was the big movie studios that once owned their own network of theaters. They were ordered to divest those holdings I think in the 1950's. And these days for a variety of reasons - movie theaters are rapidly dying. Covid being the most recent excuse, but that is just one of many over the years.
Almost all the independent theaters around here are gone. There's still a few here and there. There's even one or two drive-in theaters left in Iowa. And a new one recently opened near Fremont NE.
I believe one reason many of the independents have closed is because of the cost to update to digital projectors for the modern movie formats.
Back in the steam era, some railroads owned their own coal companies to supply their needs.
BaltACDAnd these days for a variety of reasons - movie theaters are rapidly dying.
One of the reasons is most movies made nowadays just plain suck. The last movie I saw was "1917," and that should tell you something. The wife's a big movie junkie and there's nothing she wants to see either.
As far as movies that appeal to mature men, forget it! No-one makes them anymore, or so it seems.
There's better stuff on YouTube.
Flintlock76As far as movies that appeal to mature men, forget it! No-one makes them anymore, or so it seems. There's better stuff on YouTube.
I saw 2 this month. And prob a 3rd later this month/next.
zugmann Flintlock76 As far as movies that appeal to mature men, forget it! No-one makes them anymore, or so it seems. There's better stuff on YouTube. I saw 2 this month. And prob a 3rd later this month/next.
Flintlock76 As far as movies that appeal to mature men, forget it! No-one makes them anymore, or so it seems. There's better stuff on YouTube.
Interesting Zug! Care to make any recomendations?
Flintlock76Interesting Zug! Care to make any recomendations?
Sonic 2 (only if you saw 1), The Bad Guys, and Bob's Burgers is the one later this month. Yes, there's a trend.
EnzoampsAm I just loopy, or did that exist. If so where/when did it go?
Talk about heavy reading!! The Honorable Justice could have benefited from a rhetoric class on transitions, clarity and conciseness.
Gramp Does the increase in diesel fuel price increase rail's competitiveness? Do any of the railroads have ownership of a refinery and/or oil producing land?
Delta Air lines owns its own refinery to make jet fuel. It is in a Philadelphia suburb.
That is the only major transportation company that owns its own refinery for petroleum products.
As to the rising cost of diesel fuel, railroads are able to charge a fuel surcharge to customers. Since rail is about 4 times more efficient in the use of diesel per ton mile than tricks, it may be possible that even with the surcharge, if diesel keeps rising there may be some modest shift to rail for some freight.
But for time sensitive freight and freight that needs relatively prompt dock-to-dock service, rail is likely to never be a choice regardless of the fuel price.
jeffhergertBack in the steam era, some railroads owned their own coal companies to supply their needs. Jeff
They were forced to divest their coal mines if they sold to the public
"However, in 1906, with the support of the Roosevelt Administration, the Hepburn Act was passed. This required all railroads to disinvest themselves of all mining properties and operations, and so the Reading Company was forced to sell the P&R Coal and Iron Company"
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