Oil Shipments by Rail, Truck, and Barge Up Substantially

Most oil and petroleum products are moved to refineries and consuming areas by pipeline, which is both the safest and most economical means of transporting them. However, due to a shortage of pipeline capacity, more and more oil and petroleum products are being moved by rail, truck, and barge. Those shipments almost doubled in 2012, and they are continuing to increase to move crude oil from the shale formations in North Dakota and Texas, and oil sands in Canada to U.S. refineries. Between 2011 and 2012, oil delivered to refineries by trucks increased 38 percent, crude moved on barges increased 53 percent and rail deliveries quadrupled. Because the nation’s pipeline infrastructure has not kept pace with growing domestic oil production, the market has had to rely increasingly on alternative transportation options.

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etween 2005 and 2010, 96 percent of crude oil was transported by pipeline and tanker ships to refineries. Inland refineries are generally reached by pipeline since pipeline transport has relatively low costs and high capacity. For imports and offshore production, tanker ships have been the primary form of transportation for crude oil. But in 2011, these two transportation forms began to decline in market share, representing 93 percent of the market in 2012.[ia]

Between 2000 and 2010, truck and rail shipments have averaged just 1 percent of total shipments to refineries because they are less cost-effective options for moving crude. But, beginning in 2011, truck and rail volumes increased, and represented 3 percent of refinery shipments in 2012. Domestic barge shipments also increased, accounting for nearly 3 percent as well.

Because of the lengthy regulatory review process for expanding existing pipelines or building new pipelines, the transportation of crude oil and petroleum products has moved to rail and truck, which provide more flexibility because they can use existing infrastructure. Unless more pipeline capacity is built to deal with the increased domestic crude production, it is likely that these transportation modes will expand.

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