Oil shipments and the river

If you follow the news closely you’re forgiven for thinking that all the crude and refined products flowing out of the shale plays in the U.S. are moving, rather dangerously, by rail tank car. 

However, much of that shale is “rollin’ on the river.” In fact, until pipelines are built to carry the shale crude to refineries on the Gulf and East coasts, barge transport will remain a key element of continued shale development, especially in the North Dakota Bakken and eastern shale gas plays.

How important is barge transport? Transport of crude by barge in the U.S. jumped from just over 44 million bbls. in 2008 to more than 175 million bbls. last year, a four-fold increase in just five years, according to the U.S. Energy Information Administration. The figure aligns nicely with the increase in U.S. crude production from shale deposits. Major inland waterways that have seen increased barge traffic due to crude include the Mississippi River and its tributaries, particularly the Ohio and the Gulf Intracoastal Waterway. 

A recent project in Ohio is an excellent example of the expansion of barge transport due to shale development. Last year, Marathon Petroleum built a truck-to-barge loading facility at Wellsville, Ohio, to enable it to move crude from the Utica shale to Catlettsburg, Ky., for refining. The project included a terminal capable of loading up to 50,000 bbls. of oil per day onto barges on the Ohio at Wellsville, near the Pennsylvania border. The crude transported to Catlettsburg and then loaded back onto barges for delivery along the upper Ohio, including the Pittsburgh area.

The increase in crude transport by barge has not been free of hiccups. But, considering the volumes, a good overall barge safety record and the questions surrounding rail transport, the outlook for barge transport to serve the shale boom looks bright.

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