Potential Tulsa - OKC Rail Line Sale

[Just the facts]

According to CNBC news flash, the US Department of Transportation just released a whole new set of regulations regarding shipping oil by rail.

[ou48A]

According to CNBC news flash, the US Department of Transportation just released a whole new set of regulations regarding shipping oil by rail.

The oil train crashes have put pressuer on the Gov to do something.

The new regulations will be stricter,,,,, but they will increase the cost to ship crude by rail...
But this will only increase the marjins that pipelines alreay enjoy.... This should further increass the demand for more new pipeline construction. New pipelines are sigificantly safer and provide lower cost to the consumers of crude oil products.
The efficancey gain is good for the economy.
Could this be why Warren Buffett has been buying millions of shares of XOM?

[CaptDave]

- but to get back to the good news from this morning.

With the victory in today's "scurmish", we now have Oklahoma's two largest metros on board in asking the state to maintain ownership of the Sooner Sub. All indications point to Norman joining OKC, Tulsa, Bristow, and Sapulpa tonight. I hope Edmond will adopt a similar resolution.

This should provide some leverage to cause Governor Fallin to reconsider the sale of this infrastructure. Combined with the revenue from the lease to WATCO, the Iowa Pacific proposal to start commuter service, ending the sale process IS the fiscally responsible thing to do.

Write to your representative, senator, and the governor to reinforce the city council's resolutions. Write to the Transportation Commission members.

Request that they not sell the railroad. I am not confident we will be heard directly through the Governor's office so shine the light on these transportation commissioners... They have the final say.

http://www.odot.org/tcomm/index.htm

Put state officials on notice their actions are under scrutiny and if they will be responsive to the people of the state.

[LakeEffect]

The oil train crashes have put pressuer on the Gov to do something.

The new regulations will be stricter,,,,, but they will increase the cost to ship crude by rail...
But this will only increase the marjins that pipelines alreay enjoy.... This should further increass the demand for more new pipeline construction. New pipelines are sigificantly safer and provide lower cost to the consumers of crude oil products.
The efficancey gain is good for the economy.
Could this be why Warren Buffett has been buying millions of shares of XOM?

The new regulations aren't that much stricter... the main thing is to get newer, better tank cars and then test the crude more accurately and often to ensure that the most volitile stuff is being shipped properly.

Pipelines are NOT significantly safer. They often result in more hidden environmental damage. They are also NOT much of a gain in efficiency. These pipelines are relatively small and require energy to pipe. Rail provides much more flexibility in the system for meeting demand needs.

Anyway, back to the real topic, the rail line.

[ou48A]

The new regulations aren't that much stricter... the main thing is to get newer, better tank cars and then test the crude more accurately and often to ensure that the most volitile stuff is being shipped properly.

Pipelines are NOT significantly safer. They often result in more hidden environmental damage. They are also NOT much of a gain in efficiency. These pipelines are relatively small and require energy to pipe. Rail provides much more flexibility in the system for meeting demand needs.

Anyway, back to the real topic, the rail line.

Pipelines are significantly safer (even the older ones in most cases) and by several times and this is documented and pipeline transportation is “generally much cheaper”.

Even Obama's energy secretary below recognizes the superiority that new pipelines have over rail crude oil transportation.

Except for the flexibility that rail gives and that has its firm limits due to cost performance, the performance of a new modern pipeline is better in almost every circumstance. They are cleaner, greener, cheaper and safer for people when transporting crude over distance.

This is very much part of the topic because anyone biding on the rail line will take these things^ into account and likely bid lower because they know that more pipeline capacity is on the horizon and they know they can not hope to be competitive, on a major scale.


RIGZONE - Report: US Energy Secretary Favors Reducing Oil Shipped By Rail

U.S. Energy Secretary Ernest Moniz supports reducing the amount of crude oil shipped by rail in favor of pipelines that are safer, cheaper and cleaner, Capital New York reported on Wednesday. "What we probably need is more of a pipeline infrastructure and to diminish the need for rail transport over time," he said in an interview published on the Capital New York website.

"Frankly, I think pipeline transport overall probably has overall a better record in terms of cost, in terms of emissions and in terms of safety."

A Department of Energy spokesman was not immediately available to provide more detail on Moniz's comments. His comments are among the first by a senior Obama Administration official to signal an apparent preference for shipping oil from places like the Bakken shale by means other than rail lines, in the wake of a series of explosive derailments that have alarmed the public. While pipelines are generally a much cheaper form of transport, shipping crude in mile-long trains has become a popular alternative since new terminals can be built more quickly than pipelines to serve booming remote shale patches, and offer greater flexibility for refiners -



PS: whatever gave you the idea that "these pipelines are relatively small"?

[CaptDave]

- again. Please give ou48a his own thread to repost O&G Industry trade magazine articles.

I read a rail industry trade mag article saying rail is comparable cost wise once you factor in the chemicals added to tar sands to make it flow though a pipe and the cost of removing those chemicals. Both are going to tell part of the truth. I bet the people in Mayflower AR might have a preference, but they don't matter I suppose.

[PWitty]

The new regulations aren't that much stricter... the main thing is to get newer, better tank cars and then test the crude more accurately and often to ensure that the most volitile stuff is being shipped properly.

Pipelines are NOT significantly safer. They often result in more hidden environmental damage. They are also NOT much of a gain in efficiency. These pipelines are relatively small and require energy to pipe. Rail provides much more flexibility in the system for meeting demand needs.

Anyway, back to the real topic, the rail line.

I'm with ou48A. I don't know what you have seen asserting that shipping by rail is safer/more efficient than pipeline, but everything I have ever seen is to the contrary. The only advantage to shipping by rail is that you are able to completely bypass pipeline constraints. When you get pipelines that are near capacity there is going to be a lot of pressure fluctuations in the line and you're not going to get steady production from your wells. Producing to the tanks and then shipping the oil by rail allows you to make sure there are no midstream problems that affect your production. Other than that, pipeline has the advantage over rail in basically every category to my knowledge.

Obviously if the field is relatively new, like the Bakken, then rail will also be big because there isn't any pipeline infrastructure to begin with.

Now, back to the topic.

[PWitty]

- again. Please give ou48a his own thread to repost O&G Industry trade magazine articles.

You can't like a post rebutting what ou48A says and then tell him to quit getting off topic when he refutes it with real facts.

But like I said, back on topic.

[CaptDave]

You can't like a post rebutting what ou48A says and then tell him to quit getting off topic when he refutes it with real facts.

But like I said, back on topic.

Fair enough.....but I was mainly liking the "Back to topic" part.

[ou48A]

Although this is a bit dated the Obama state department endorse the following view.

“Proponents for the roughly 1,200 mile pipeline, delivering the oil in Canada's Alberta province to refineries on the U.S. Gulf Coast, say moving huge volumes of crude by rail would be dirtier and more prone to mishap than a pipeline and the market would adopt rail if the project were halted. The State Department report endorses that view.”

Keystone pipeline vs. rail transport evaluated - News - 1450 WHTC Holland's Hometown Station

This^ would impact the bid and possible maintenance of the rail line for reasons previous mentioned.
It a totally valid point.

[ou48A]

Even the Treehugger says crude shipped by pipeline is much cheaper and safer too.
IMO This is just part of why we need to speed up rather than slow the development of major transmission pipeline. The railroads know more pipelines are on the way.... They will likely lower their long range risk.

http://www.treehugger.com/fossil-fue...-oil-rail.html

"Pipelines have long been favored by energy companies because they are generally cheaper and safer. The argument for trains comes down to simple math. Moving a barrel by rail can cost $15, compared with $3 to $6 by pipe, depending on destination. But that price difference pales next to a $20 to $30 premium for reaching the right destinations. That creates an advantage for rail carriers, which can adapt to changing markets in days, compared with the years – if not decades – it takes to build new pipe."

[Spartan]

True - I wonder how many NEC repairs and upgrades a small percentage of what we spent in Iraq would have bought? Maybe even paid for a MidWest Corridor HSR system with Chicago as the hub, CA HSR.

But water - and bags of cash - under the bridge. What do we do now going forward? That is the most important question. Initiatives like the Eastern Flyer are probably the best place to start.

You have to think Midwest HSR will depend on the success of the CHI-STL line. I can't believe the 3 C's route in Ohio is having difficulty moving forward. Ohio had the money and then Kasich was elected and the money diverted to widening I-71 to three lanes all the way through Ohio.

That's the transportation reality of today. If we don't build rail we will be adding lanes forever just to keep up.

[CaptDave]

Norman City Council passes 'Do Not Sell' resolution unanimously.

Tulsa, Sapulpa, Bristow, OKC, & Norman are on record asking the state to maintain ownership of the Sooner Sub keeping the possibility of privately operated commuter service open. Will the state listen?

The nagging thought I have is maybe all these resolutions are 'safe' votes for the councils they know will have no bearing on the ultimate fate of the line, but look good for their constituency. But will hope for the half full scenario.

[Just the facts]

Elected officials doing what the electorate wants - where is the problem in that?

I have maintained for a long time that all that is needed to fast-track rail in Oklahoma is for someone to get it first. The cities and towns in Oklahoma (and the rest of the country as well) can see the writing in the wall and they know road maintenance/construction consumes an enormous amount of resources. If these towns and cities want to keep their wheels of commerce turning they know we have to greatly reduce the cost of moving goods and people.

I wouldn't be surprised for Lawton, Chickasha, and maybe even Altus to chime in. In fact, every town on this map should be voting on a resolution.

[CaptDave]

I think you misunderstood - councils may be adopting these resolutions knowing all the while the outcome is already decided by the state. But still hoping the transportation commission will take notice of the number of municipalities weighing in and letters/calls asking the state not to sell the line and make a concerted effort to start passenger service. The fact the governor and ODOT have refused to respond to Iowa Pacific's proposal to start service without any state support is an indication of their intent.

I agree if someone can just get the first operation started and successfully fill a service void, the state will be forced to expand rail initiatives. It has worked that way in every other state that has invested in something other than roads. So I intend to take the half full attitude until the cup is truly empty.

[Just the facts]

I think you misunderstood - councils may be adopting these resolutions knowing all the while the outcome is already decided by the state. But still hoping the transportation commission will take notice of the number of municipalities weighing in and letters/calls asking the state not to sell the line and make a concerted effort to start passenger service. The fact the governor and ODOT have refused to respond to Iowa Pacific's proposal to start service without any state support is an indication of their intent.

I agree if someone can just get the first operation started and successfully fill a service void, the state will be forced to expand rail initiatives. It has worked that way in every other state that has invested in something other than roads. So I intend to take the half full attitude until the cup is truly empty.

Trust me, I know what you mean because I live in a state that had Charlie Crist as a governor. If the elected officials in these towns and cities think they can fool their constituents they are mistaken - they can't. However, I don't think that is the case since all of these towns have been on record for awhile wanting to get passenger rail service. You might be right that it isn't necessarily a unanimous desire as the votes suggest, but it is definitely a majority and if the opposition is afraid to vote the way they want - then good, they should be afraid.

[CaptDave]

Got it - makes sense. I think if somehow OKC-Tulsa service can be started, it will be successful. That would eventually lead to expanding the service and we could end up with something similar to your state system.

[Just the facts]

Got it - makes sense. I think if somehow OKC-Tulsa service can be started, it will be successful. That would eventually lead to expanding the service and we could end up with something similar to your state system.

That is why I have a 7 phase implementation plan.

https://sites.google.com/site/okcrai...ation-phases-1

[OKCisOK4me]

If the rail lines were that straight and flat, we'd have passenger rail now.

I sure hope WATCO is awarded sale of the line. The Lawton-OKC-Tulsa spine is a no brainier...

[CaptDave]

^ I agree IF the sale proceeds. WATCO definitely would be the preferred buyer.

[Just the facts]

Doh!

In Kansas City today...

Bold move forward on commuter rail, trails - KansasCity.com

The potential of building commuter rail in Jackson County is much brighter thanks to a new, positive agreement between Jackson County and Union Pacific Railroad.

This comment has to hurt

This kind of long-range planning is the mark of progressive communities. If Jackson County wants to offer a new kind of transit option — whether five or 25 years from now — officials must take bold action to prepare for that future.

[CaptDave]

And here we could have service started within six months if ODOT would get out of the way.

[Plutonic Panda]

Future of Oklahoma train line remains uncertain | News OK

[CaptDave]

::::::::::::::::::ONR :: 7:00 PM Tonight :::::::::::::::::::::::

State Railroads will be a subject on tonight's Oklahoma News Report (ONR) at 7:00PM. We encourage you to tune in. Other than waterways, rail is the most fiscally and energy efficient mode of transportation available.

State owned rail assets are important to Oklahoma's transportation future. Oklahoma's transportation budget is considered by many unsustainable, especially in light of the bankrupt federal Highway Trust Fund.

Spending statistics are staggering. Forty-six percent of Oklahoma's transportation budget is derived from federal sources. Last year, the state spent nearly $1.6 billion on transportation projects. Multimodal innovation is necessary if the public and Oklahoma visitors are to continue enjoying the same effective transportation available in the 20th Century.

Identifying more efficient transportation solutions is critical as the state proceeds through its second century, especially for those Oklahomans who live in some poverty stricken rural areas.

The Oklahoma Department of Highways became Oklahoma Department of Transportation (ODOT) in 1976. Several bills are being heard in the legislature this session to address anticipated shortfalls by steering ODOT back to its an honest multimodal vision. Please be aware of these bills and help us work them through the complex legislative process.

Of specific interest is this unfortunate crisis. In January 2013, the Oklahoma Department of Transportation (ODOT) placed the state owned, 97.5 mile Oklahoma City - Sapulpa rail line up for sale. This line was purchased in 1998, partially for passenger rail development between the state's two largest metropolitan areas.

Over the past 16 years an Oklahoma corporation, The Stillwater Central Railroad, has rehabilitated both the state infrastructure and restored a customer base neglected by the former owner, the BNSF Railway. Both infrastructure and Oklahoma population density have reached points where passenger rail is again viable. So viable in fact that the cities of Tulsa, Oklahoma City, Sapulpa, Bristow, and Norman have passed resolutions requesting that the state's most strategic rail line remain in state ownership. Other entities, such as the Bristow Chamber of Commerce have followed with others expected.

The Stillwater Central leased this line in the same year of state purchase. The Class II railroad has invested over $15 million in rehabilitation of what is state property through a public private arraignment. During the same era the Stillwater Central has paid over $3 million in lease payments. Currently the Stillwater Central Railroad is on a pace to pay the state $600,000 annually.

Earlier this month, Iowa Pacific Holdings partnered with the Stillwater Central in order to operate three successful and popular excursion trips. The 900 tickets available sold out within 10 days of announcement. Iowa Pacific Holdings CEO Ed Ellis considered the trips so successful that his corporation is ready to begin daily service between Oklahoma City and Tulsa by the fall.

Yet the state has ignored two unsolicited proposals, one in 2011 and another in November of last year. This is despite the fact Ellis' Iowa Pacific passenger rail service department is profitable. Iowa Pacific would operate a six frequency Oklahoma City - Tulsa service. Ellis' considers it would become the premiere Iowa Pacific service offering.

[CaptDave]

Bill Leighty: Let?s band together to save Sooner Sub line - Tulsa World: Readers Forum