In a new report titled “Crude by Rail: The New Logistics of Tight Oil and Oil Sands Growth,” IHS said that a peak in crude-by-rail transport is expected at about 1.5 million barrels per day (MMbbl/d) in 2015 or 2016. At that amount, more than 10% of North American crude production would move to market by rail.
Since 2009, crude-by-rail transport has increased from 20,000 bbl/d to more than 950,000 bbl/d, the report said. The average for 2014 is expected to be about 1.1 MMbbl/d. Even with new pipeline capacity coming online, including the stalled Keystone XL Pipeline among other projects, more than 900,000 bbl/d will likely be transported by rail in North America through 2020, according to the report.
The report also examined safety issues surrounding crude-by-rail transport, as well as implications of new safety rules in the U.S. and Canada. The report found that train accidents have decreased by more than 40% during the last decade even while transport of “hazardous materials,” a classification crude oil falls under, has increased. However, accidents involving crude oil shipments have increased during that time, the report found, as crude-by-rail transport accounted for a much smaller percentage of rail transport before 2009. The report expects that new proposed regulations aiming to make crude-by-rail transport safer will also lead to more traffic for the same volume of crude.
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