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Due to a recent shortage of pipeline capacity, more crude oil and petroleum products are being moved by rail, truck and barge, according to a recent report from the Institute for Energy Research (IER).
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%, crude moved on barges increased 53% and rail deliveries quadrupled, according to the report.
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, the IER said.
Between 2005 and 2010, 96% of crude oil was transported by pipeline and tanker ships to refineries, the report said. Between 2000 and 2010, truck and rail shipments have averaged just 1% 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% of refinery shipments in 2012. Domestic barge shipments also increased, accounting for nearly 3% as well.
Unless more pipeline capacity is built to deal with the increased domestic crude production, the IER expects these transportation modes will expand.
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