Railways cash in on oil boom
From virtually nonexistent three years ago, shipments of crude oil are fast becoming a significant business for CN and CP while triggering considerable debate about their future importance. The rapid growth of oil-by-rail transportation is the result of North American oil companies suddenly having far more product to transport to market than existing pipelines can handle, James Cairns, CN`s Vice-President for Petroleum and Chemicals, told the annual Rail Government Interface conference in Ottawa.
As well, building new pipelines faces considerable opposition from environmental and First Nations groups while the railways have the ability to ramp up capacity with additional locomotives and tank cars, he added. National Steel Car Co. in Hamilton has begun building tank cars and that should help reduce the backlog in orders for them. `Pipelines will remain the dominant way of transporting oil and natural gas but rail can play a significant role,` he continued. `This is a niche opportunity for the railways.` They move the oil in unit trains, which on their return trips from refineries to the loading terminals can carry the diluent that`s mixed with the crude so it can be moved through pipelines.
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