Railroads may save Californians at the pump

The Golden State's geography isolates it from most domestic oil and gas supplies. But growing shipments via rail might change that.

By Bruce Kennedy Mar 25, 2013 10:46AM

Image: Railroad Crossing with Train (© Edmond Van Hoorick/Photodisc/Getty Images)Californians might like to think of themselves as being on the cutting edge of American trends, but their state remains woefully isolated when it comes to oil and gas supplies.


The Golden State ranks first in the nation for gasoline consumption, and it has has some of the nation's highest gas taxes. Many of its counties use a more expensive gasoline mixture that creates less smog and other pollutants to meet the state's strict air quality standards.


And while it remains a major oil producer, California has a relatively small number of oil refineries and terminals. Also, only a very limited number of of pipelines bring in refined gas and oil overland from elsewhere in the country. In fact, according to the Los Angeles Times, last year marked the first time that California had to import more than half of its oil (50.7%) from overseas.


But some relief may be coming: Many experts believe oil and gas transported by rail -- especially from North Dakota's fast-growing oil fields, where few pipelines have been built yet -- may help relieve California's gas and oil crunch.


The U.S. Energy Information Administration notes that, while pipelines still transport about two-thirds of all U.S. oil and petroleum products, the amount of those products moved by America's railroads was up 38% during the first half of 2012, compared to the same time period in 2011.


BNSF Railway, a subsidiary of Berkshire Hathaway (BRK.A), serves many Western states. And according to the L.A. Times, BNSF moved 100 million barrels of oil last year, compared to just 1.3 million barrels in 2008. Also in 2012, the company invested $197 million in new track, rail replacements and other projects in North Dakota and Montana.


The Times says big refineries and oil companies, like Chevron (CVX), Valero Energy (VLO) and ConocoPhilips (COP), are all on board when it comes to improved and expanded rail transportation of their products.


"Frankly, rail looks to us that it's going to be very, very viable into the West Coast," William Klesse, chairman and CEO of Valero, told the newspaper. Californians can only hope he's right.


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32Comments
Mar 25, 2013 12:18PM
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If we all want to save at the pump stop exporting or gasoline.
Mar 25, 2013 11:56AM
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I work in the Oil and Gas industry. I am excited at what my industry can do in the near future to help America get back on its feet, If we can get past the liberal fools in the Government.
Mar 25, 2013 1:22PM
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Californians need to be saved from Californians.
Mar 25, 2013 10:56AM
Mar 25, 2013 12:46PM
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Our governor will require the trains that bring in gasoline to be wind or solar powered.
Mar 25, 2013 12:45PM
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Lets see how the liberals stop the trains from hauling oil from ND.
Mar 25, 2013 2:18PM
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California should make the environmentalist register and put red license plates with chips on their cars so they can only purchase 5 gallons of gas at a time.  There is no reason for those retards being on the road and burning so much fuel.  California needs to join the 21st century and try to keep up with the economy and jobs in the real United States.  The EPA is the worst form of regulations as it causes many employers to just close and purchase products from other countries who can make them cheaper and without all our regulations.  California needs to reform their gas tax as interstate truckers won't purchase gas in California because of the high tax.  They fill up in Arizona where it is much cheaper.
Mar 25, 2013 12:44PM
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I live in So Cal and my father in law lives in Torrance.  When we visit him, we drive right by the Mobil refinery.  The Mobil gas station that is adjacent is typically among the highest gas prices for all of the LA area.  Not sure why, but it does make me wonder.
Mar 25, 2013 11:33AM
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Amazing how at least one sector of the economy is able to thrive IN SPITE of Obama. It takes not only increases in supply, but increase in capacity to distribute oil & gas to where it can be refined and where it is needed.

 

A number of rail transfer facilities are being developed and built. Areas of oil production build pipelines from fields to transfer stations where oil & gas products can be stored and loaded on rail cars to head off to refineries.

 

Many of the pipelines are intra county or intra state which means the federal government (Obama) can't get his hooks into the deal as I do not believe there is any federal environmental permitting required.

Mar 25, 2013 12:56PM
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Hopefully this will bring down the price of gas I doubt it will but it's good to dream.
Mar 25, 2013 1:08PM
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I think the pipeline would benefit everyone in this country. Rail roads can't serve quick enough,, Did anyone ever travel by rail or work for a railroad.. Talking about bottle necks and long waiting periods. Obama must get off his dead **** and do something before there's a major war with IRAN, while we have more oil in our country then the whole middle east who have become rich oil barons because of our stupid neglect.

Mar 25, 2013 12:55PM
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Rail can handle this need for our nation better than any pipelines ! It will also create new well paying jobs that will still be there when the pipeline builders have long since left . They will bring building and people to communities that help with tax bases . And, the railroads pay property taxes too !
Mar 25, 2013 6:31PM
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So the enironmentalists dont want to run safer pipelines, and instead the industry has to ship their products over rail, which while fairly safe, is still not as safe, costs more to ship, and is more unsafe than pipelines. The rail industry has ordered nearly 40,000 tank cars to be delievered in the next 2 years because of the Keystone pipeline being blocked by the radicials, such as President Obama.
Mar 25, 2013 3:11PM
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Let's get the solar industry going.  China's biggest solar panel maker is going under.  Now is the time to get started because solar is free to harvest and every new building being built ought to have solar panels on the roof.  That ought to be standard code.  What the heck are our lawmakers doing? 

 

Congress is fighting about everything anymore, instead they ought to get the building codes up to date and make some much needed changes.  Why are some of these lame politicians still in office? Only because they cater to the lobby.  Use your vote, not your gun. Happy Easter Egg Hunting!

Mar 25, 2013 1:08PM
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Why not? Sounds like a terrific test for technology with reality in cooperation. No standard train could sustain all the earthquake activity but some form of hybrid could.

Mar 25, 2013 12:27PM
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Seriously...I find it amazing how some ignorant people are blaming Obama for whether certain business are flourishing, or falling along the wayside....?

 

It's called demand....Businesses spend money for expansion when there is a NEED or DEMAND.

 

There are more pipelines being built at a fervid pace...

Oil Companies are bringing new wells or old wells back on line everyday..

Nat Gas discoveries and recovery methods have increase probably 10 FOLD in the U.S.?

Rail cars are/were in a little slump, because of Coal shipments, but this may bode well for them.

Mainly because they can't get the pipelines in quick enough...

If you don't know shidt about it....You really shouldn't try commenting with useless dribble.

Mar 25, 2013 12:29PM
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"IN SPITE OF Obama"...You sound like a fkin idiot...And I get tired of bullshidt..
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