SEAL BEACH, Calif. Shale
plays are making the West a "very hot market" for both the
railroads and the tank cars that transport output from
energy-rich regions, one railroad executive said.
Shale-based crude oil production
is likely to continue to exceed pipeline capacity, Ken Norwood,
director of business development for Union Pacific Railroad
Co., said at an Association of Women in the Metals Industries
meeting late last week.
"Try to get a tank car
todayits impossible," said Norwood, whose company
transports oil for customers in North Dakotas Bakken
Shale and other regions. He said a customer recently
couldnt find a single available tank car to move
chemicals from Houston to the San Francisco area.
Shale-based energys impact
on the steel industrynot just on tubularshas been
on the radar for some time. Jack P. Biegalski, director of
plates and product control for ArcelorMittal USA LLC, Chicago,
said during the Association of Steel Distributors 2013
Annual Convention in March that the Marcellus Shale energy play
in Pennsylvania and adjacent states represented a "huge boom"
for the steel business, with "a lot of (petroleum) product"
moving by rail car (amm.com, March 25).
At the time, Biegalski noted the
Obama Administrations delayed approval of TransCanada
Corp.s proposed Keystone XL pipeline, which boosted
companies need to find alternative methods of moving oil,
including by rail car.
In other news, Norwood said
Omaha, Neb.-based Union Pacific, which currently has about
12,000 gondola cars, will add about 200 units, mostly
transverse trough rail cars, to its fleet this year. He called
transverse carswhich are designed to ease loading of
metal coils while eliminating much of the need for blocking and
bracing, as well as reduce damage associated with coil
telescopingthe "cars of the future" for hauling coils.
Union Pacific has roughly 2,000 transverse cars in its fleet,
At the same time, the company is
watching the ongoing Panama Canal expansion and its possible
impact on transport in the region, Norwood said. The expansion
will accommodate higher-capacity ships, including post-Panamax
vessels, which can carry 13,000 to 14,000 20-foot equivalent
unit (TEU) containers, up from the current Panamax vessels,
which can only carry 4,400 TEUs. But Union Pacific says the
project wont hurt the current levels of intermodal
container traffic through the West Coast.
"We really dont see a huge impact," he said, pointing
out that shipment times will remain shorter via sea-rail
transit. For example, intermodal shipments from Shanghai
through Seattle to the New York/New Jersey metropolitan area
take 20 days vs. 28 days via Panama Canal, he said.