Rail movements of oil have continued to soar in 2013, as the U.S. drilling boom forces more oil into the market than nation’s current pipeline network can handle, the Association of American Railroads reported Thursday.
In the United States alone, rail movements of petroleum and petroleum products are up 38 percent so far this year, when compared with 2012. In the last week, rail movements were up 8 percent from the same week last year.
Throughout North America, rail movements of petroleum and petroleum products rose 29 percent so far this year, compared with the same period in 2012, the organization said.
There have been nearly 776,000 carloads of petroleum and petroleum products moved in North America so far this year, the association said.
Oil companies have been moving more crude by rail because of soaring oil production in areas without easy pipeline access to refineries.
Although shipping crude by rail is more expensive than pipelines, the flexibility it has provided to oil companies has allowed them to access refineries and compete with high-priced foreign oil. The result is greater returns for oil producers and typically lower costs for refiners.