“It is possible that domestic crude shipments could be $5 to $15 per barrel cheaper than imports. With such savings, East Coast refiners that are connected by rail and barge to North Dakota may cut back on or stop importing oil.”
The preceding quote comes from Kevin Horn’s Inland Insider column in the upcoming April issue of WorkBoat. And it’s like music to my ears. I am, as I’ve mentioned, ad nauseam, of the generation that watched presidential administrations jump through hoops, either from fear of or for the purpose of pushing their own agendas, to placate members of the Organization of Petroleum Exporting Countries (OPEC) while we, the great unwashed, stood by in frustration.
But never mind my own petty indulgences, this is great news for the inland barge industry. Horn points out that the BNSF Railway, which handles large volumes of crude oil shipments from the North Dakota Bakken shale oil fields is committing in the neighborhood of $1 billion to purchase up to 5,000 new rail tank cars (railroads have typically left the responsibility of tank car ownership to shippers). This is a radical departure for BNSF and signals to the transportation industry that domestic crude oil shipments have a very bright future.
What does this have to do with the barge industry? Well, cargo from the North Dakota fields also moves by barge along the Missouri River. “The barge industry continues to be well positioned to move domestic crude, whether it’s in competition or coordination with rail,” Horn, who is a senior manager with GEC Inc. in Delaplane, Va., said, before adding a kicker for barge owners. “To be successful in this market requires having the right assets in the right place.”
You can read Horn’s column in full in the next issue of WorkBoat.