Responding to growth in Montana’s oil, coal and agriculture economies, Burlington Northern Santa Fe Railroad on Tuesday opened an economic development office in Billings.
Since 2009, demand for new or expanding rail facilities in Montana has doubled, and with Bakken oil development expected to increase in the state, an economic-development office was warranted, said Vann Cunningham, BNSF assistant vice president of economic development.
“It just makes a lot of sense for us, given the economic development here, to put someone on the ground,” Cunningham said. “The closer you are to an economic-development project, the better the project goes.”
The announced opening comes days after the Big Sky Economic Development Corporation advanced its plans for a rail industrial park feasibility study to be carried out by KLJ Engineering.
Cunningham told The Gazette that communities like Kalispell, Billings and Great Falls have the potential for a rail industrial park of 80 to 100 acres with the ability to expand to 200 acres.
However, the big driver for rail development in the near-term is Bakken oil. BNSF opened an economic-development office last year in Bismarck, N.D. to accommodate rapidly increasing demand for oil transportation there. That oil development is now maturing, Cunningham said. New expansion in the oil play is expected in northeastern Montana.
“As we are building out the first phase of the Bakken and coming into the second phase, expansion is moving increasingly into the state,” Cunningham said.
Outbound deliveries of Bakken crude are expected to increase. BNSF expects to deliver Bakken crude to two dozen different destinations in 2014, but that number will jump to 50 in 2015. As oil development expands in Montana, demand for rail-delivered well supplies will also increase.
“When you look at the amount of materials that are used, inbound inputs, you have 40 carloads for every well you drill,” Cunningham said. “You’re talking about sand, you’re talking about chemicals, you’re talking about drilling mud and you’re talking about large amounts of pipe.”
The number of new or expanding facilities with a need for new rail infrastructure had increased from eight a year in 2008 and 2009, to 22 facilities in 2012, Cunningham said. BNSF has completed 18 Montana projects so far this year with more expected to close in the last two months. Since 2010, roughly 40 new facilities have come online in Montana, which has meant more than 320 new jobs an $80 million infrastructure development, according to BNSF.
Most of that growth is connected to agriculture, with a rapid increase in million-bushel grain elevators capable of quickly loading 110-car shuttles with wheat in short order. Each loading facility requires a large loop track capable of accommodating a 110-car train while it loads and then placing it back on the main rail line.
BNSF ships 57,000 rail cars of grain out of Montana every year. It ships 230,000 rail cars of coal. Both commodities will play significant roles in Montana’s economic development moving forward, but oil will be the multiplier.
BNSF is currently hiring 250 workers in Montana to fill existing and new positions.