Dangers Aside, Railways Reshape Crude Market

BN-EQ348_0921CR_G_20140921170609

Shipping Crude by Rail Expands as New Pipelines Hit Headwinds and Train Companies Reap Revenue

By Russell Gold and Chester Dawson

In May 2008, a locomotive with a grizzly bear painted on its side pulled into a railroad siding next to an abandoned grain elevator in the ghost town of Dore, N.D. The engine, property of the Yellowstone Valley Railroad, hitched up a couple of tank cars of crude from nearby oil wells and set off on a thousand-mile journey to Oklahoma.

Dore would never be the same—and neither would the U.S. energy industry. Until then, most oil pumped in North America moved around the continent in pipelines. Suddenly, and just as the oil industry began a period of unprecedented growth, there was an alternative: “crude by rail.”

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