Amid stalled pipeline projects, trains chug on

Dec 28, 2012 | 03:04 PM | Michael Cowden

Tags  TransCanada, Keystone XL, Oneok, Bakken Crude Express, Pipe Logix, Kurt Minnich, Preston Publishing, Paul Vivian pipeline

CHICAGO — When it comes to new shale oil plays, rail is increasingly moving in on territory long dominated by pipelines.

While most industry observers say that pipelines are in no danger of losing market share to rail over the long term, some question whether economic or political factors have caused the current lull in pipeline development.

"North Dakota is the poster child of (rail being used to move oil)," said Kurt Minnich, editor of Pipe Logix, published by Spears & Associates Inc., Tulsa, Okla. "The gas products need to go in a pipeline or be flared. And that’s what you see in some of North Dakota. They just flare it so they can ship out the oil."

Natural gas is often found in conjunction with oil and so it must be flared—burned off—if it is not going to be brought to market.

Rail and pipelines are almost always competitors when it comes to moving liquids, Minnich said. But they serve slightly different markets, with rail often moving product first before pipeline infrastructure can catch up.....