The volume of North American crude oil shipped by train continues to fall due to the narrowing spread between West Texas Intermediate (WTI), Bakken and North Sea Brent.

The Association of American Railroads (AAR) reported U.S. petroleum and petroleum product shipments were down 4.7% for the year through the end of August, compared to the first eight months of 2014. For the week ended Aug. 29, shipments were down 15.3%, year over year. However, Canadian crude by rail shipments rose for both periods compared to 2014, according to AAR. This was because of demand created for bargain-priced Canadian oil.

“We note from weekly crude oil import data that heavy crude from Canada has seen decent demand in the U.S. in recent weeks,” Global Hunter Securities said in an Aug. 28 analysis of crude-related rail traffic. “Much of the lift has been catalyzed by exceptionally low prices for Canada crude. Indeed, some quotes were putting Western Canadian Select (WCS) at about $20 per barrel (bbl) just two weeks ago.”

The WTI-Brent price spread has been in the range of $5/bbl recently, compared to as much as $20/bbl two years ago. The spread in 2015 peaked at $8/bbl in April. That narrowed differential makes more-expensive rail transport uncompetitive with pipelines—if pipeline service is available. Pipeline service is not always in place, particularly in the isolated Williston Basin, and rail transport remains an option for producers in such areas.

That narrowed price spread has led some Atlantic Coast refiners running primarily lighter crudes to move back to imported oils in place of Bakken oil. Irving Oil Ltd. recently confirmed that its 320,000 bbl/d refinery at St. John, New Brunswick—one of the largest refineries on North America’s East Coast—is no longer processing Bakken crude, all of which was shipped by rail.

An Irving spokesman said the move was a global supply-and-demand issue unrelated to rail-safety questions. The runaway train that caused an explosion and fire in Lac-Mégantic, Quebec, in July 2013 was hauling Bakken oil from North Dakota to the St. John plant. A Wall Street Journal article said the plant is now running crudes from Saudi Arabia, western Africa and a small amount of WCS shipped by rail from Alberta.

Irving announced in late August that it would begin a 60-day turnaround Sept. 16.

Another challenge, besides price, to eastbound crude trains could come from new pipeline capacity.

“The Northeast/Quebec crude oil-by-rail story is very likely to be substantially transformed by the eventual completion of TransCanada’s Energy East Pipeline,” Global Hunter said in a recent analysis. “The project is still in the application phase. Assuming the pipeline is approved and proceeds, then it is expected that it will be operational by 2018. The pipeline project would convert and expand upon an existing natural gas pipeline system and convert it for transmission of crude oil within Canada. Projected capacity is indicated at 1.1 MM bbl/d.”

Going west from the Williston Basin, shipments of Bakken crude have remained comparatively stronger as production of Alaskan North Slope crude dwindles—the primary crude used by West Coast refiners. However, those refiners faced an unusual impediment to their supply in late August: forest fires. Fire lines moved within a few hundred feet of BNSF Railway’s main line across Montana, in and around Glacier National Park, for several days at the end of August. That closed the track to all rail traffic, including crude shipments.

Meanwhile, fire fighters used the closed railroad to reach fires that were otherwise inaccessible by highway. Very heavy smoke also grounded fire-fighting aircraft. The fires forced closure of many of Glacier park’s popular attractions.

“Wildfires remain a continued concern across the inland Pacific Northwest. There are currently about 100 large fires impacting parts of Idaho, Oregon, Montana, Washington, and California,” BNSF spokesman Gus Melonas said in a late-August press statement.

The drop in what was once a rapidly growing business segment comes at a difficult time for North American railroads, which are also losing traffic in a far-larger product category: coal. The AAR reported as September started that year-to-date coal shipments through August were down 11.1% from 2014. A primary reason has been fuel switching to natural gas—good news for gas transmission systems.

Longer term, there will continue to be a market for crude by rail, primarily for Bakken production, according to railroad analyst Fred Frailey.

“Bakken oil really can’t compete on the Gulf,” Frailey said in a recent blog post. “That’s kind of a dead market for pipelines. Crude by rail to East Coast and West Coast occurs primarily because there are no pipelines. Rail has a 60-70% share with East Coast refineries. [On the] West Coast they are sending as much as they can but terminal capacity has to go up. Eventually if they get approval for those terminals, you will have more crude going to the west.”