Trains Playing Major Role in Plains Oil Boom

Dec 29, 2012

File photo of railroad cars

BILLINGS, Mont. (AP) — Energy companies behind the oil boom sweeping the Northern Plains increasingly are turning to trains to move their crude across the U.S. The move comes as plans for the Keystone XL pipeline to Texas stall and existing pipelines in hubs like Cushing, Oklahoma can't keep up with demand.

Delivering oil by rail to refineries thousands of miles away on the East, West and Gulf coasts costs more. But it can bring increased profits — of $10 or more a barrel, and boost the earnings of railroads like North Texas-based Burlington Northern Santa Fe. BNSF is owned by Omaha, Nebraska-based Berkshire Hathaway.

It also means a steady parade of trains carrying the hazardous material rumbling out of North Dakota and Montana and across the country.

Experts and federal regulators say rail transport is less safe than pipelines. That's raised concerns the proliferation of oil trains could lead to a major derailment and spill.

Companies say they are making track upgrades and other improvements.