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Tar Sands oil pipeline update

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Posted by Anonymous on Sunday, November 13, 2011 6:31 PM

samfp1943

To Bucyrus:.  I think that we have got a problem of agreement over the whole global warming issue.  I am extremely skeptical as to its ramifications and a real existance, and you seem to fall into another whole spectrum of belief about it. So maybe our best course is to agree to disagree(?)  

Sam,

 

I think you misunderstand my point.  My viewpoint on global warming probably about the same as yours.  I certainly did not bring it up as the reason why I oppose the pipeline.  I am actually for the pipeline unless there is some obvious geophysical based flaw in the routing of it.  I only brought up global warming to clarify what I see as the objection to the pipeline.  I see the objection to the pipeline as being one small component of a much larger objection agenda.  That is the agenda against the use of fossil fuels.  And the reason there is that opposition against the use of fossil fuels is exclusively due to the theory that such use is causing the destruction of the planet through the mechanism of climate change.    

 

In that context, you could almost say that in shooting down the pipeline, the pipeline is actually beside the point.  The pipeline routing is beside the point.  Shipping the oil by rail as a pipeline alternative is beside the point.  In the larger perspective, the only thing that will satisfy the opposition is leaving the oil in the ground.  And in this country, the opposition is in power.  In Canada and China, they are not.    

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Posted by MidlandMike on Sunday, November 13, 2011 11:06 PM

I think erikem nicely summed up the main causes of pipeline spills: distinct events such as the Yellowstone River spill (probably caused by a river in high flood stage scouring the river bed deep enough to impact the pipeline); or more dispersed problems like corrosion.  In either case, exposure to problems is directly related to length of the pipeline.  You would have to justify the extra length of a line against the sensitivity of the area to be avoided.  The Sand Hills are such a large area (one-fourth of  Neb.) that to be coldly rational, you could not do significant damage to that vast an area, even with a large spill.  On a more positive note,  oil production and pipelines are a pervasively regulated  industry, and pipeline companies have learned to monitor and quickly react to spills, as ignoring clean-up is not a real option.

With regard to tanker trains, the Tar Sands are a different situation than that of the tanker trains presently operating from North Dakota.  The Bakken is still considered conventional production, and is profitable enough to sustain rail transport for now.  The Tar Sands are much more marginal and would seem to require the economy of a pipeline.

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Posted by Jack_S on Monday, November 14, 2011 2:23 AM

I saw an item in the paper (LA Times I think) about the USA exporting over 800,000 barrels of refined oil products (Mostly diesel fuel oil) from refineries is Texas.  So I bet that if that pipeline ever gets to Houston it will feed the refineries that export oil products.  Of course it will depend on where the price is highest.

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Posted by Mookie on Monday, November 14, 2011 7:22 PM

Obviously - the right people read the Trains Forum.  They are moving the pipeline out of the sandhills. 

I am pleased. 

Now I need to start a campaign to run more trains by my watch site!  Especially during the daylight hours! 

Yes

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Posted by schlimm on Monday, November 14, 2011 7:32 PM

http://www.chicagotribune.com/business/sns-rt-us-transcanada-nebraskatre7ad2c2-20111114,0,5103699.story

"Nebraska and Trans Canada Corp agreed on Monday to find a new route for the stalled Keystone XL pipeline that would steer clear of environmentally sensitive lands in the state."  So the pipeline will get built in Nebraska, but avoid the Sandhills and Ogadalla aquifer.  Apparently some of the posts on this thread were pure Chicken Little hysteria.

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Posted by Paul_D_North_Jr on Monday, November 14, 2011 7:59 PM

tpatrick
The original question was whether railroads could handle the job if the pipeline were not built. It might be useful to consider some numbers in this regard.

The pipeline is intended to deliver 700,000 barrels per day  (Investor's Business Daily 11/13/2011) to a terminal in the Houston -Port Arthur TX area. Other estimates range from 590,000 to 1.1 million barrels daily, but for this example let's stick to the 700K figure.

Using a typical 30,000 gallon tank car (LD LMT 196,500 lbs, LT WT 66,500 lbs), we can determine how many cars are needed per day. Heavy crude weighs about 7.27 lbs per gallon according to figures I can dig up. Dividing the load limit of the tank car (196500) by the pounds per gallon of crude (7.27)  you find that each car can carry 27028 gallons. Multiply the 700,000 barrels daily delivery x 42 gallons per barrel and divide that number by gallons per car (27028) and your result is the number of tank cars per day needed to unload at the terminal: 1087.

Question: How many trainsets are necessary to provide 1087 cars unloading daily at the south end? And of course the same number must be loading at the north end, as well. Of course there are many other questions about routes, traffic capacity, ROW improvements and more. I will be interested in reading your comments, particularly whether this attempt at analysis makes any sense at all and whether it sheds any light on the subject. 

  Your logic and math above are all OK (or close enough) as far as you went, in my view.  The only other calculation I'd add is the number of barrels per tank car:  27,028 gals. / 42 gals. per bbl. = 643.5 barrels per tank car, and so I get 1,088 cars per day to deliver the 700,000 bbls. per day. 

To me, the next biggest unknown is the cycle time - how many miles each way at an average speed, plus time to load and unload, plus a little bit of 'padding'.  With round-trip cycle times in the 9 to 14 day range, roughly from 9 to 14 trainsets of 1,087 cars each would be needed.  At a guess-timated $100,000 per car, that's $108.7 million per trainset, or from $980 million to $1,522 million for cars alone.  Figure 6 locomotives per 100 cars for about 2 HP/ ton = 65 for each 1,087 car trainset at $2 million each = $130 million or so for a $108.7 million trainset, or about $1.20 for each $1.00 of car.  Again, with 9 to 14 day cycle times, that would be from 65 x 9 = 585 to 65 x 14 = 910 locomotives, for an additional $1,170 million to $1,820 million.  Altogether, the rolling stock's capital investment alone could range from $2,150 million to $3,342 million (insert famous Everett Dirksen quote about "A $Billion here") - but still less than half of the pipeline's $7 billion estimated cost.  What this really illustrates is the validity of John Kneiling's obsession with over-the-road speed and cycle times; a lot of money could be spent on management and improvements to cut down on the time and hence number of cars required.

If it was me, I'd look at originating and terminaling about 4 trains of about 272 cars each daily, with lots of Distributed Power - 16 locos per train, say a pair every 32 to 35 cars or so, with ECP brakes, 'high-air' lines, etc. 

See also Fred Frailey's current blog/ column on all this, and some of the traffic estimates mentioned therein - "The next Powder River Basin", posted 11-11-2011 - at: 

http://cs.trains.com/TRCCS/blogs/fred-frailey/archive/2011/11/11/the-next-powder-river-basin.aspx

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Posted by Anonymous on Monday, November 14, 2011 8:27 PM

Well, yesterday the project was on hold for a couple years.  Has it now been resumed  to continue without delay, or is it still on hold for two years even though a committment has been made to bypass the sand hills?

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Posted by Mookie on Monday, November 14, 2011 9:46 PM

I'm not even going to bite on the chicken little bit, but our legislature and gov are right now in special session to figure out how to keep it out of both places. 

 

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Posted by Anonymous on Monday, November 14, 2011 10:04 PM

What I have heard is that the pipeline builder has offered to bypass the sand hills, which will add 40 miles to the route and require an extra pumping station.  However, I have heard nothing that indicates that the offer to bypass the sand hills has been accepted, or will be accepted as the final condition of approval.  Moreover, I have not heard that the two-year delay has been cancelled as a result of the offer to bypass the sand hills, or that the offer to bypass the sand hills will be accepted after the two-year delay.  

 

And I see no indication of any assurance that the pipeline will ever get built in Nebraska, little chickens notwithstanding.    

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Posted by samfp1943 on Monday, November 14, 2011 10:04 PM

Bucyrus

 

 samfp1943:

 

To Bucyrus:.  I think that we have got a problem of agreement over the whole global warming issue.  I am extremely skeptical as to its ramifications and a real existance, and you seem to fall into another whole spectrum of belief about it. So maybe our best course is to agree to disagree(?)  

 

Sam,
 
I think you misunderstand my point.  My viewpoint on global warming probably about the same as yours.  I certainly did not bring it up as the reason why I oppose the pipeline.  I am actually for the pipeline unless there is some obvious geophysical based flaw in the routing of it.  I only brought up global warming to clarify what I see as the objection to the pipeline.  I see the objection to the pipeline as being one small component of a much larger objection agenda.  That is the agenda against the use of fossil fuels.  And the reason there is that opposition against the use of fossil fuels is exclusively due to the theory that such use is causing the destruction of the planet through the mechanism of climate change.    
 

In that context, you could almost say that in shooting down the pipeline, the pipeline is actually beside the point.  The pipeline routing is beside the point.  Shipping the oil by rail as a pipeline alternative is beside the point.  In the larger perspective, the only thing that will satisfy the opposition is leaving the oil in the ground.  And in this country, the opposition is in power.  In Canada and China, they are not.    

Sorry for the delay in getting back to you Bucyrus. 

Based on the above, I owe you an apology. Apparently, I misjudged your comments. A case of letting my own prejudices overcome reality. It seems we share common ground. 

 Please, accept my apology!Crying

 

 

 


 

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Posted by Anonymous on Monday, November 14, 2011 10:30 PM

No problem Sam.  I figured you just misunderstood me to be agreeing with the pipeline delay.  I did not really make my personal position clear when I posted the reasons I was seeing for the delay.

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Posted by ericsp on Monday, November 14, 2011 10:50 PM

Bucyrus

Well, yesterday the project was on hold for a couple years.  Has it now been resumed  to continue without delay, or is it still on hold for two years even though a committment has been made to bypass the sand hills?

According to the article, it will take 12 to 18 months for the new EIR. Only after that will the State Department make a decision.

"'The process requires a new Environmental Impact Statement for the new proposed route and based on prior projects similar in scope we expect it will take 12 to 18 months to complete,' the official told Reuters.

"The U.S. State Department still must give the final approval to the project because it crosses an international border. But the Obama Administration will likely not have to deal with the politically charged issue until after the 2012 election because of the time it takes to study a new route."

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Posted by Paul_D_North_Jr on Tuesday, November 15, 2011 6:11 AM

Link to GATX "Tank Train" webpage - so glad to see it's still listed:

 http://www.gatx.com/wps/wcm/connect/GATX/GATX_SITE/Home/Rail/Rail+North+America/Products/Equipment+Types/Tank/Tank+Train/

Note that it says unloading rates is 3,000 gals. perminute, and a 90-car train can be unloaded in less than 5 hours.  So with 3 parallel tracks of just over a mile long - each for 1/3 of the train, my 4 hypothetical 272 car trains daily theoretically could be loaded and unloaded in a 6-hour window, so that part of the cycle can be set.

As to the rest, if it's a 2,000 mile 1-way route (this is confusing to me - see this webpage for a lot more details than I ever knew before, esp. about Phases 1 and 2 having been completed, and the 'stitch together' nature of Phases 3 and 4, etc., though the usual disclaimers apply: http://en.wikipedia.org/wiki/Keystone_Pipeline ), let's look at some possible average speeds, cycle times, and hence the implications for equipment needs: 

Avg. speed 20 MPH ==> 100 hrs. (4.2 days) each way + 0.25 day to load/ unload = 4.45 days 1-way x 2 ways = 8.9, say 9 or 10 days, hence 9 or 10 x 1,087 cars, etc. as above. 

Avg. speed 30 MPH ==> 66.7 hrs. (2.8 days) each way + 0.25 day to load/ unload = 3.05 days 1-way x 2 ways = 6.1, say 6 or 7 days, hence 6 or 7 x 1,087 cars, etc. as above. 

Avg. speed 40 MPH ==> 50 hrs. (2.1 days) each way + 0.25 day to load/ unload = 2.35 days 1-way x 2 ways = 4.7, say 5 days, hence 5 x 1,087 cars, etc. as above. 

Keep in mind that per the above, each trainset would be roughly $110 million for cars and $130 million for locomotives, for a total of $240 million.  Speeding-up the over-the-road portion of the operation from 20 to 40 MPH cuts the size of the fleet required by half (of course), from 9 or 10 to 5 trainsets - a saving of 4 or 5 trainsets at $240 million each ==> $960 million to $1.2 billion.   Much faster or slower than these ranges, and the number of locomotives per train should be adjusted as well for a different HP/ ton level.

By the way, at 6% interest over 30 years ($6.00 per month = $72 per year per $1,000 borrowed or invested), each of those $240 million trainsets would cost about $48,000 per day = $2,000 per hour in interest and amortization (capital recovery) alone, so there's a big incentive to provide the management staff and talent and physical and oeprational improvements to run them as fast as practically possible. 

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Posted by rrnut282 on Wednesday, November 16, 2011 6:32 PM

I just have one question for those opposed to the pipeline.  Whose smokestack do you want it to go up?  One here in N America where it is regulated, monitored, and kept reasonably clean, or in China where anything goes(up the stack)??

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Posted by Anonymous on Wednesday, November 16, 2011 6:45 PM

rrnut282

I just have one question for those opposed to the pipeline.  Whose smokestack do you want it to go up?  One here in N America where it is regulated, monitored, and kept reasonably clean, or in China where anything goes(up the stack)??

But when it goes up the stack in China, we are told that it reduces global warming.  I think it has something to do with whirlpools spinning backwards over there.    

 

http://www.tgdaily.com/sustainability-features/57022-chinese-coal-use-slows-global-warming

 

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Posted by garyla on Wednesday, November 16, 2011 7:47 PM

If Leonard DiCaprio and Julia Louis-Dreyfuss are against it, it must be stopped!  Wink

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Posted by miniwyo on Wednesday, November 16, 2011 8:07 PM

Move it west by 100 miles or so... Wyoming will take the Right of Way money!

In reality, how many accidents happen per year? 1? Those are usually caused by extenuating circumstances, like the Yellowstone River leak or construction activity hitting the line. So, chances are, during the life of the line, odds are a leak will not happen.

Just to put it in perspective, On sunday, I got a call from one of our customers that buys our liquids. They had a reported leak, and needed me to quit pumping into the line. I did, and within an hour I got a call back that it was a false alarm. Moral of the story, if a leak should happen, the operators know right away and are on top of the situation.

I understand the concern of contaminating the ogalala aquifer, but Nebraska doesn't know what they are missing out on. Right of way Leases will give a much needed financial boost to both the state and private landowners.

RJ

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Posted by blue streak 1 on Wednesday, November 16, 2011 8:16 PM

Paul_D_North_Jr

Keep in mind that per the above, each trainset would be roughly $110 million for cars and $130 million for locomotives, for a total of $240 million.  Speeding-up the over-the-road portion of the operation from 20 to 40 MPH cuts the size of the fleet required by half (of course), from 9 or 10 to 5 trainsets - a saving of 4 or 5 trainsets at $240 million each ==> $960 million to $1.2 billion.   Much faster or slower than these ranges, and the number of locomotives per train should be adjusted as well for a different HP/ ton level.

- Paul North. 

Paul great numbers. What I have read indicates the HP needed to move 10 train sets ( of  X cars  ) at 20 MPH is only slightly less than the HP needed to move 5   train sets at 40 MPH. So the reduction in tank cars needed would certainly reduce the overall costs of tank cars but requires the same costs for locomotives.. 5 train sets would have ~ 2-1/2 + times HP to move the cars at 50 MPH.  Probably would require both mid train and end of train DPU. If DPU were placed at 1/3 and 2/3 locations of the train quick breakdown of the train at the terminals would be possible for the 3 parallel tracks.  Just uncouple ahead of the 1/3 and 2/3 DPUs which would speed up positioning tank cars maybe saving  1 - 2 Hrs in and out  ?? Would need a qualified conductor / engineer and maybe one additional engineer or a quick van trip ?

Granted that the empty car trains probably would return at 50 - 60 MPH even if they ran loaded at 20 MPH so savings are not as much as  RT  trains that have same approximately same trailing tonnage.

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Posted by Paul_D_North_Jr on Wednesday, November 16, 2011 9:13 PM

blue streak 1
  [snipped] So the reduction in tank cars needed would certainly reduce the overall costs of tank cars but requires the same costs for locomotives.. . . . Just uncouple ahead of the 1/3 and 2/3 DPUs which would speed up positioning tank cars maybe saving  1 - 2 Hrs in and out  ?? Would need a qualified conductor / engineer and maybe one additional engineer or a quick van trip ?

  Thanks for the compliment, and for making that point.  Said another way: A 'traditional' railroad practive would run at 20 MPH to save costs by using about 1/2 less locomotives than at 40 MPH.  But that will use twice as many cars to achieve the same throughput, and so will have twice as many trains out on the line at the same time, each with half as many locomotives - and 2 x 1/2 = 1, or roughly the same total number of locos ! (i.e., not much savings there, and almost twice as much car expense).  Which is why John Kneiling was so obsessed with that element - it's not that the oil on the train needs a fast trip, but it's less costly that way, which is more profit for the railroad.   

Kneiling also had a dismissive expression for the usual railroad approach to this kind of opportunity back then - it was nothing more than "How do we route the pipe ?" - which meant that the competitive rail movement of the oil wasn't even being considered or attempted. 

Also a good point about the extra qualified personnel to perhaps help separate the train into segments and spot them on each unloading track.  Although those arrangements are very site specific, after further thought I ennvision that my suggested 272+ car train would use pairs of locos spaced out in blocks of 30 to 35 cars or so = about 8 or 9 blocks per train, each 2,600 ft. or so long (1/2 mile), all DPU's and close enough that radio Locotrol and ECP signals would still be strong enough to repeat reliably.  At the terminals it would be a quick shuttle to cut each block apart and then run it independently into a separate loading/ unloading track - say, a yard that's 10 tracks across x 1/2 mile long on each track from the clearance point to the end, with a loading/ unloading rack between each pair of tracks, plus probably another 1/4 mile or so for a ladder to connect all the tracks back together again.  Since the train is going back where it came from, and is being broken up anyway to keep the overall length of the yard and the racks within reason, the yard doesn't need to be double-ended for a run-through move, or use a loop to turn the train; that also provides an opportunity to refuel the locos, and maybe cut them off for movement to a local service facility for sand, etc.  So to get that done pretty promptly with an 8 or 9 block train, it might take as many as 3 qualified engineers/ hostlers plus a couple carmen seems about right - with each one taking a block at about 5 min. intervals, the entire train could be cut apart and moved up in about 20 minutes, and likewise for reassembly before then performing the Initial Terminal Air Test, etc.       

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Posted by Paul_D_North_Jr on Wednesday, November 16, 2011 9:21 PM

Two possible game-changing 'wild cards' on this came to light today:

  1. Reversing the flow of the Seaway pipeline from Cushing, OK to the Gulf Coast; and,
  2. Building just the inside-the-US portion of the Keystone XL pipeline, also from Cushing to the Gulf.

See this article in the NY Times' on-line edition at:

http://www.nytimes.com/2011/11/17/business/energy-environment/route-proposals-may-ease-an-oil-pipeline-bottleneck.html

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Posted by erikem on Thursday, November 17, 2011 12:26 AM

miniwyo

In reality, how many accidents happen per year? 1? Those are usually caused by extenuating circumstances, like the Yellowstone River leak or construction activity hitting the line. So, chances are, during the life of the line, odds are a leak will not happen.

That's pretty much what I wrote earlier in this thread, nice to see someone with pipeline operating experience validate my guesses.

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Posted by tatans on Thursday, November 17, 2011 5:32 PM

With the TCP delay Canada is now seriously thinking of going to the west coast, lots of talk and interest, a sidebar to the tarsands and as large as it is in Alberta, the largest part of the tarsands lies in Saskatchewan which is yet untapped.

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Posted by miniwyo on Friday, November 18, 2011 12:39 AM

erikem

 

 miniwyo:

 

In reality, how many accidents happen per year? 1? Those are usually caused by extenuating circumstances, like the Yellowstone River leak or construction activity hitting the line. So, chances are, during the life of the line, odds are a leak will not happen.

 

 

That's pretty much what I wrote earlier in this thread, nice to see someone with pipeline operating experience validate my guesses.

- Erik

 

Pipes font just leak. There is usually some kind of outside force. Sadly, the most common is dozer operators not paying attention and cutting it with the ripper. Usually causing an explosion. :(

 

A new refinery isn't economical, the owner would never make thier money back on the investment for a new refinery. Pipe is cheaper to get it to an existing refinery.

RJ

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Posted by miniwyo on Friday, November 18, 2011 12:41 AM

Also, did anyone notice, that as soon as the delay was announced, gas prices spiked way up?

 

RJ

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Posted by Paul_D_North_Jr on Friday, November 18, 2011 8:55 AM

Big article on that in yesterday's (Thurs., Nov. 17, 2011) Wall Street Journal.  The analysis there was that oil (and hence gas) prices have been artificially low because of the glut of oil at Cushing, OK.  However, reversing the flow of the Seaway pipeline and installing the Cushing to Gulf Coast segment of the Keystone XL pipeline will solve that problem (for the oil producers), and allow the price to be more nearly in line with market levels elsewhere (bad for refiners).  There was also a follow-on article back on page C12 or so about how diesel and other 'middle distillates' is the stuff that's really in demand,,and even more expensive.  It's all a complictaed web, connected in many places . . .

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Posted by Anonymous on Friday, November 18, 2011 9:22 AM

Paul_D_North_Jr

Big article on that in yesterday's (Thurs., Nov. 17, 2011) Wall Street Journal.  The analysis there was that oil (and hence gas) prices have been artificially low because of the glut of oil at Cushing, OK.  However, reversing the flow of the Seaway pipeline and installing the Cushing to Gulf Coast segment of the Keystone XL pipeline will solve that problem (for the oil producers), and allow the price to be more nearly in line with market levels elsewhere (bad for refiners).  There was also a follow-on article back on page C12 or so about how diesel and other 'middle distillates' is the stuff that's really in demand,,and even more expensive.  It's all a complictaed web, connected in many places . . .

- Paul North. 

In this new scenario, does this mean Canada will just accept the status quo with existing U.S. pipelines handling their tar sands output?  Or will Canada push ahead with their own plans to sell their oil to new markets in anticipation of their expanded output?

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Posted by Paul_D_North_Jr on Friday, November 18, 2011 9:33 AM

Link to a much shorter on-line version of the article I referenced above (that notably doesn't include the mention of the inaugural 103-car unit train of crude from North Dakota last month which is in the print version  . . . ): 

"Oil Jumps on Pipeline Deal" by Chip Cummins:

http://online.wsj.com/article/SB10001424052970203699404577041901234224874.html 

See also "Oil Refiners After the Pipe Dream" by Liam Denning, also published Nov. 17, 2011, at:

 http://online.wsj.com/article/SB10001424052970204517204577042102007987684.html 

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Posted by Anonymous on Friday, November 18, 2011 11:20 AM

Paul,

 

Strangely, it seems like the news of killing the pipeline project has morphed into news about eliminating an oil transport bottleneck out of Cushing, OK.  I don’t get the connection unless it is just to put market happy-face on killing the tar sands pipeline.  

 

I can’t tell if this turnabout is the actual news media thrust, or if it is just something happening in this thread.   

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Posted by MidlandMike on Friday, November 18, 2011 12:40 PM

Bucyrus
Paul,
 
Strangely, it seems like the news of killing the pipeline project has morphed into news about eliminating an oil transport bottleneck out of Cushing, OK.  I don’t get the connection unless it is just to put market happy-face on killing the tar sands pipeline.  
 

I can’t tell if this turnabout is the actual news media thrust, or if it is just something happening in this thread.   

The line thru the Sand Hills is only an extra capacity short-cut to existing Keystone lines that already connect Canada with Oklahoma.  Additionally they were going to continue the line from Oklahoma to Texas, but for now may simply reverse the flow direction on some one else's idle line between those points.

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Posted by Anonymous on Friday, November 18, 2011 1:04 PM

But if they needed the extra capacity of the short-cut line through the Sand Hills, how does the "reverse flow" link from OK to TX solve the problem of losing the needed extra capacity of the line through the Sand Hills?

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