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Canadian rail company eyes takeover of U.S. rival

Rail company Canadian Pacific makes unsolicited bid for U.S. rival Norfolk Southern. Photo by Steven Frame/Shutterstock CALGARY, Alberta, Nov. 18 (UPI) — Rail company Canadian Pacific said it made an offer to U.S. rival Norfolk Southern Corp. to join forces to create a new transcontinental transit entity. Canadian Pacific said it was "proposing a business combination that would create a transcontinental railroad with the scale and reach to deliver improved levels of service to customers and communities while enhancing competition and creating significant shareholder value." Merging the two rail companies would create a network stretching to the southern U.S. border and across most of Canada . The industry, following its peers in the oil and gas pipeline sector, has faced challenges because of a decrease in coal shipments and changing needs for oil and gas transit. Last week, industry research group Genscape said leasing rates for rail car model […]

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EIA: Alberta oil will move by rail

U.S. study of post-Keystone XL energy landscape in Canada finds rail may carry more oil across the region. Photo by Steven Frame/Shutterstock WASHINGTON, Nov. 11 (UPI) — Crude oil deliveries from Alberta, Canada, will rely on rail in the wake of the permit refusal for Keystone XL , the U.S. Energy Information Administration said. The U.S. State Department last week denied TransCanada’s permit to build the cross-border Keystone XL oil pipeline. The project was designed to carry as much as 830,000 barrels of oil per day from Canada to Nebraska. From there, it would eventually send oil through the so-called Gulf Coast Project, which TransCanada put into service in 2014, and on to refineries along the southern U.S. coast Mark Cooper , a TransCanada spokesman, said saying no to Keystone XL means more of Canada’s crude oil would be sent to the U.S. market by rail, which the company […]

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Railroads Lose Challenge of Oil-Train Rules

Railroads lost an agency appeal with the U.S. Department of Transportation in a battle over new crude-by-rail rules that require the installation of expensive new brakes on trains hauling hazardous flammable materials. In a ruling issued by its Pipeline and Hazardous Materials Safety Administration last week, the agency denied appeals challenging the new rules, including one from the Association of American Railroads. “While we understand that shippers, carriers, and tank-car manufacturers for Class 3 flammable liquids will face new challenges in the wake of these regulations, we maintain that they are capable of complying with the final rule,” the agency wrote. The rail-industry group could still appeal the decision in court. A spokesman said the organization is reviewing the decision and considering its options. The new rules, issued by the Transportation Department in May , include the phasing in of tougher tank-car standards over several years and requirements for […]

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2nd train derails in Wisconsin in 2 days, spills crude oil

Train Derailment WATERTOWN, Wis. (AP) — A Canadian Pacific Railway train carrying crude oil derailed Sunday in Wisconsin, the second day in a row a freight train derailed in the state. The eastbound CP train derailed about 2 p.m. in Watertown in the southeastern part of the state. The railroad said at least 10 cars derailed, and some were leaking. No fires or injuries were reported. CP was sending teams to the site. "CP takes this incident extremely seriously," the railroad said in a news release. On Saturday, a freight train derailed near Alma in western Wisconsin, spilling thousands of gallons of ethanol. BNSF Railway said crews continued Sunday to transfer ethanol from the derailed cars and get the cars back on the tracks. The BNSF train derailed at 8:45 a.m. Saturday about two miles north of Alma, a town along the Mississippi River. Some of the 25 derailed […]

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Audit Finds Montana Railroad Safety Lacking as Oil Traffic Rises

HELENA, Mont.—Montana’s oversight of railroad safety falls short at a time when crude-oil train traffic from the Bakken region, already high, is only expected to increase, a new audit found. Montana has no active rail-safety plan and employs only two inspectors to cover the state, the Montana Legislative Audit Division report released Wednesday said. In addition, there is a lack of statewide emergency planning and hazardous-material response capability should an oil spill occur, the report said. That is a potentially precarious situation with a new crude-oil transfer station in North Dakota coming online that should boost oil traffic crossing Montana from about 10 trains a week to as many as 15 cars a week. About 20% of Montanans live in an evacuation zone for an oil-train derailment, which is within a half-mile of a rail line, the report said. Two of the agencies criticized in the report said they […]

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Truckers Again Becoming More Competitive With Rail

For years, railroads like Union Pacific have been developing their intermodal businesses of moving containers and trailers, allowing them to compete directly with truckers on their home turf. As fuel prices skyrocketed and trucking companies faced driver and capacity crunches, railroads became a logical, cheaper choice. But diesel prices have fallen by about 30% over the past year to $2.531 per gallon, according to the U.S. Energy Information Administration, something that has made trucking prices more competitive again. “I think you look at what’s going on currently in the trucking environment, the lower fuel cost is allowing trucks to be more competitive vis-à-vis rail, just by virtue of that fact,” said Eric Butler, Union Pacific’s executive vice president of marketing and sales, on an earnings call with analysts Thursday. While Union Pacific still expects to be able to grow its domestic intermodal business to record volumes for the seventh […]

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Oakland Coal Terminal Becomes a Political Flash Point

A major commodities shipping terminal would be adjacent to the Port of Oakland, above. OAKLAND, Calif.—A proposal that could make this city a gateway for Utah coal to be shipped overseas has become a political flash point and put pressure on Gov. Jerry Brown, a former mayor known for his warnings on climate change, to come out against the project. The proposed deal would grant four coal-producing counties in Utah rail access to a major commodities shipping terminal under development on city land, adjacent to the Port of Oakland, in exchange for a $53 million investment. City officials hope the redevelopment plan, on an old Army base, would bring thousands of jobs to a city that still has pockets of poverty and violence even as the region’s tech sector booms and housing costs rise. California ports in Stockton, Richmond and Long Beach export coal, but because of climate change […]

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Hauling crude oil may be causing train tracks to fail

The only sign of trouble aboard a Norfolk Southern train, hauling roughly 9,000 tons of Canadian crude in western Pennsylvania last year, was a moderate sway in the locomotive as it entered a bend on the Kiskiminetas River. The first 66 cars had passed safely around the curve when the emergency brakes suddenly engaged, slamming the train to a stop. The conductor trudged back nearly a mile through newly fallen snow to see what happened. Twenty-one cars had derailed, one slamming through the wall of a nearby factory. Four tank cars were punctured, sending 4,300 gallons of crude pouring out of the tangled wreckage. The cause of the accident in North Vandergrift was identified as a failure in the rails — not aging or poorly maintained tracks, but a relatively new section laid less than a year earlier. The February 2014 crash fits into an alarming pattern across North […]

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Exclusive: Canada railroads cut crude freight rates to lure shipments

The Canadian Pacific railyard is pictured in Port Coquitlam, British Columbia February 15, 2015. Canadian rail companies are slashing rates for shipping crude in their first serious effort to revive an industry rocked by the rout in global oil prices, according to shippers and terminal operators who are seeing discounts of as much as 25 percent. The move highlights how railroads are struggling to compete with pipelines for a share of shrinking crude shipments across North America, particularly in Canada, where a long hoped-for boom in oil sands traffic has fizzled with the oil bust. Canadian National Railway and Canadian Pacific Railway, which together account for the vast majority of crude-by-rail cargoes shipped across the country, are dropping prices, four people familiar with the cuts told Reuters. The size of the cuts varied among sources, leading one source to suggest that railroads may be working with individual shippers to […]

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A risky proposition: The ‘regulatory hole you could drive a train through’

Shiho Fukada for Al Jazeera America Propane tanks sit on the rail depot of Grafton & Upton Railroad in Grafton, Massachusetts, Sept. 24, 2015. This article was produced in collaboration with the New England Center for Investigative Reporting , a nonprofit news outlet in Boston that holds the powerful accountable and trains a new generation of investigative reporters. GRAFTON, Mass. — In early 2012, residents of this sleepy town began to notice an unusual amount of activity around the Grafton & Upton rail yard at the north end of town. An old barn that had stood for over a century was knocked down. Bulldozers came out, clearing the land. The tiny 16.5-mile railroad had been nearly defunct, but was purchased in 2008 by Jon Delli Priscoli, a major local developer with a penchant for railroads; he also owns a Thomas the Tank Engine theme park 70 miles away. At […]

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After calamitous year for coal, U.S. consumers hold key for rails

A shovel is placed over coal briquettes during a protest in front of the chancellery in Berlin December 3, 2014. Investors in U.S. railroad stocks, who have been punished in 2015 by an accelerating decline in high-margin coal shipments, now are pinning their long-term hopes on a resurgence in consumer spending. Their bet is that a strengthening economy will produce enough demand that railroads will be able to replace the income lost to years of declining coal use with so-called intermodal shipping – the movement of containers stuffed with clothing, furniture and other consumer goods. Thanks to environmental rules regulating power plant emissions, coal use has declined steadily since peaking in 2008. So far this year, freight volumes have tumbled 9.2 percent as low energy prices encouraged utilities to switch to burning cheaper natural gas, while the strong U.S. dollar has hurt exports. The accelerated decline this year has […]

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Low natgas prices, high utility stockpiles weigh on US railroad coal volumes: executives

With myriad headwinds driving down coal shipments this year, officials with Class 1 US railroads painted a dim picture of their coal business Wednesday while speaking at the Cowen and Company 8th Annual Global Transportation Conference in Boston. In presentations broadcast online, officials with CSX, Northern Southern, Union Pacific, Kansas City Southern and Genesee & Wyoming sited low natural gas prices, mild summer weather and high utility stockpiles as the primary causes for a drop in demand. Fredrik Eliasson, CSX’s chief sales and marketing officer, said the railroad will lose about $400 million in coal business this year compared with 2014 and by the end of this year about $1.3 billion of coal revenue will have "disappeared" over the last four years. "I think it’s more and more realistic to think that where we are from a coal perspective, we’re not going to go back to kind of the […]

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North Dakota gets energy transit grant

North Dakota gets federal grant to improve safer transport of energy products like crude oil. Photo by Steven Frame/Shutterstock WASHINGTON, Sept. 1 (UPI) — A grant from a federal safety regulator will help North Dakota invest in the infrastructure needed to transport oil safely and efficiently, a senator said. U.S. Sen. John Hoeven , R-N.D., said the federal Pipeline and Hazardous Materials Safety Administration granted the state about $200,000 to improve its ability to respond to incidents involving the transportation of hazardous materials like crude oil . "It’s important for us to invest in the right kind of infrastructure to move energy [resources] as safely and efficiently as possible, now and into the future," Hoeven said in a statement. "This grant will help us do just that." Hoeven, who serves on an energy committee in the U.S. Senate, said he’s been pushing an agenda that includes improvements in rail […]

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Big Rail’s little cousins find boon in U.S. oil-by-rail bust

Unused oil tank cars are pictured on Western New York & Pennsylvania Railroad tracks outside Hinsdale, New York August 24, 2015. Amid the rolling mountains surrounding this quiet town in southwest New York state, tucked away on miles-long stretches of underused rail tracks, hundreds of idle oil tank cars attest to the extent of fallout from oil’s rout. The oil tank cars – a year ago sought-after to haul crude from North Dakota to New Jersey – now stand idle as a result of two converging trends: the reversal in U.S. shale oil production and the completion of new pipelines. They show how the pain from the slump in the oil-by-rail industry has spread far and wide. Big rail lines, such as Berkshire Hathaway-owned BNSF Railways or Union Pacific are losing what used to be their fastest-growing source of new traffic; refiners such as PBF Energy are left with […]

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