Burlington Northern Santa Fe Railway announced Tuesday that it has increased capacity to ship 1 million barrels a day of shale oil from the Bakken fields in Montana and North Dakota.
No information was immediately available about routes out of the Bakken to markets throughout the country or whether those trains pass through Billings.
In BNSF’s press release from its headquarters in Fort Worth, Texas, the railroad said the increased capacity would benefit other commodities, including agricultural products.
“Historically, oil and gas producers have used pipelines to transport crude from production to refineries and ultimately on to end users,” said John Lanigan, BNSF executive vice president and chief marketing officer.
“Because this shale development growth came about so quickly, there has been a shortage of pipeline capacity to deliver production from new unconventional sources to coastal refiners. BNSF has responded quickly to enable producers to move crude to the most attractive markets and secure the best prices.”
U.S. Sen. Max Baucus, D-Mont., said the railroad’s decision supports the need for the Keystone XL pipeline. The controversial Alberta-to-Gulf-Coast pipeline, proposed by TransCanada Corp., also would ship oil from the Bakken. It would cross hundreds of miles in Eastern Montana. Montana’s entire congressional delegation backs the project.
“As we look for every way to support the opportunities presented by the Bakken energy boom, I’m pleased to see BNSF respond to the need for more capacity to support our homegrown energy,” Baucus said. “The news is further evidence that we cannot afford to continue to delay the Keystone pipeline.”
BNSF said that its network reaches all major coastal and inland markets and directly serves 30 percent of U.S. refineries in 14 states. Currently, the railroad has 1,000 miles of rail line in the Williston Basin area. It connects to 16 of the top 19 oil-producing counties in central and western North Dakota and five of six oil-producing counties in Montana.
In the five years since BNSF began hauling crude out of the Williston Basin, it has seen a huge increase in the amount it ships, said Dave Garvin, BNSF group vice president for industrial products. It went from 1.3 million barrels in 2008 to 88.9 million in 2012.
BNSF said it has invested $197 million in 2012 on projects in Montana and North Dakota to increase its shipping capacity. Since 2011, the company has hired more than 560 employees to fill existing and newly created jobs in the two states, the statement said.
The railroad said it has also formed a dedicated Unit Energy Desk that works directly with customers to help coordinate and plan unit train movements to and from the Williston Basin.
The press release said that it has increased efficiency and capacity by increasing train size from 100 to 104 tank cars, and in some cases up to 118 tank cars.