Bakken Crude?

[beaulieu]

Not all refineries are created equal. Each refinery is designed to process a specific type of crude oil which ranges from Light, to Intermediate, to Heavy, and also from Sweet (low sulphur) to Sour (lots of Sulphur). The Refineries in Montana are running at or near capacity on the type of crude that they are designed for and supplied by pipeline. The Bakken Crude is a Light and fairly sweet crude that commands a top price. The owners of the Bakken crude are moving it to terminals where they can get the best price. In the last year Cushing, OK (the largest spot market and terminal for crude) has had a glut of Light Sweet Crude relative to the Refineries connected to it by pipeline. So the owners of the Bakken crude have been shipping their oil to terminals where they can get a better price. The price of delivered Light Sweet Bakken Crude at St. James, LA has been enough higher than the Cushing, OK terminal that it more than compensates for the rail freight charge to ship it there. Louisiana Crude Oil is a Light Sweet Crude similar to Bakken Oil, with production of Louisiana Oil failing for the last several years, Refineries set up to process Louisiana Oil have to either get similar oil from the Persian Gulf or have the Bakken Oil shipped by Rail to a location where it can be put into a pipeline for final delivery. The Oil Producers like Rail's flexibility to change delivery locations with the changing price of oil at each market. Gone are the days when the big oil companies controlled production from Well to Gas Station. We are fast approaching the day when the big companies like Chevron, BP, Shell, and Exxon, will not own any Refineries or have any interest in Gas Stations. Marathon Oil just sold the Refinery nearest me in St. Paul to a company that didn't exist last year. The company that bought it was formed by an Investment Fund that feels they can make money now. You may not be aware of it, but collectively US refineries lost over $300 million dollars last year. That is why several have closed.

[Norm48327]

There are three refineries in Montana and four in Wyoming. Why would they ship the crude farther south than necessary?

[Geared Steam]

I'm not sure about BNSF but KCS has announced the construction of a unit train crude oil facility in Port Arthur TX for unit train coming in from the Bakken Shale.

 

[Sawtooth500]

I'm actually most curious as to the routing of how BNSF would ship this from the Bakken formations in western ND to LA - possible take it over Cajon Pass to get to their transcon? Or take it west to the cost and then take it south through oregon and CA? The best route would be UP's route from Salt Lake City to LA, but I don't believe that BNSF has trackage right there. Any thoughts?

[ericsp]

I have noticed some BNSF trains (I suspect H BARPAS and H PASBAR) that have large blocks of tankcars carrying crude oil (possibly light crude since the placards are flammable instead of combustible and the tankcars are 30,000 gallon capacity). So far I have not been able to find evidence of Bakken crude going to Los Angeles area refineries. However, since this appears to be new, I wonder if that is what is going on.