LVXXU

Congestion and Competition among Commodities
This rapid increase in rail usage to transport oil has exacerbated existing capacity constraints in the rail systems, which
are determined by multiple factors, including the throughput on the rails themselves, the operation of loading and
unloading facilities, the number of locomotives and rail cars, train speed, and the availability of qualified employees.
The overlap of crude oil movements from the Bakken with coal moving out of the adjacent Powder River
Basin, along with high volume of rail shipments of agricultural commodities from the region, present a
singular set of challenges. Just as crude oil is transported to major ports for refining and export, so too are
other commodities. Figure 5-3 shows the range of commodities shipped by rail in 2013, by percent of tonnage
and revenue. The shipments of a number of these (such as crude petroleum, petroleum products, and sand
used in hydraulic fracturing for oil and gas production, known as frac sand) have been influenced strongly
by increased shale oil production in the West and development of natural gas resources in the East. For every
new well, the Nation’s railroads move approximately 40 rail cars of drilling material. 18 While most of the
sand transported by rail is used for cement production, road building, and other construction purposes, 19
industrial sand, which includes frac sand, makes up about one-third of total carloads in this category, and this
subcategory is growing about twice as fast as other sand and aggregate cargoes. 20 Frac sand makes up the bulk
of this increase. 21 The need to move frac sand and other drilling inputs is a significant factor in the multi-year
backlog of the production of various types of rolling stock—with back orders reaching 124,000 rail cars as of
late 2014, an increase of 25 percent between June and December 2014. 22
23, 24
Figure 5-3.Class I Railroad Commodities, Percentage by Weight and Gross Revenue (2013)
8.3%
2.6%
2.6%
2.9%
2.2%
25.4%
19.9%
4.1%
5.7%
6.6%
39.5%
3.1%
2.6%
3.4%
1.0%
3.9%
13.9%
4.5%
7.4%
8.1%
10.0%
7.8%
13.0%
7.2%
Total - 1.76 Billion tons
Total - $72.1 billion
Coal
Chemicals & allied products
Non-metallic minerals
Farm products
Misc. mixed shipments
Food & kindred products
Metallic ores
Metals & products
Refined petroleum & coke
Stone, clay & glass products
Crude petroleum, nat. gas
Other commodities
Energy commodities and associated products account for a large portion of rail traffic. Crude oil has grown to 3 percent of national (Class I) rail
revenues and more than 2 percent of tonnage. Transport of crude oil and petroleum products, chemicals, crushed stone, sand, and gravel, all of which
are strongly influenced by shale oil production growth, are more significant on a regional basis, and, in those regions, tend to perturb both other
energy and non-energy commodity movements on a constrained rail network.
QER Report: Energy Transmission, Storage, and Distribution Infrastructure | April 2015 5-7