Shale’s sudden emergence on the U.S. energy scene has caused problems for producers trying to ship copious amounts of crude to refineries. North Dakota has been one of the big fracking winners, but the sudden glut of oil and gas there has far outstripped pipeline capacity, and oil companies haven’t sat idly by waiting for new pipelines to be built. Instead, they’ve put their crude on railcars—a more expensive and more dangerous option, but the only one available. This oil by rail boom that has accompanied the shale revolution is putting a tremendous strain on rail infrastructure, and squeezing out farmers who have traditionally relied on trains to bring their harvests to customers. Now, there’s a massive backlog of grain waiting for its chance to ride our nation’s rails, and with a record harvest coming, farmers are in a bad way. The NYT reports:
[R]eports the railroads filed with the federal government show that for the week that ended Aug. 22, the Burlington Northern Santa Fe Railway — North Dakota’s largest railroad, owned by the billionaire Warren E. Buffett — had a backlog of 1,336 rail cars waiting to ship grain and other products. Another railroad, Canadian Pacific, had a backlog of nearly 1,000 cars. […]A recent study conducted by North Dakota State University at Ms. Heitkamp’s request found that rail congestion could cost farmers in the state more than $160 million because a local oversupply of grain has lowered prices. […]The study was done before the current harvest, which is forecast at a record 273 million bushels of wheat, up from 235 million bushels in 2013. This year’s soybean harvest is also expected to be a record, and corn will be a near-record.
Shipping crude by rail isn’t ideal. Pipelines are more efficient, cheaper, and generally safer than shipping oil by train—which, as we’ve seen a number of times recently, can end in fiery disaster in the event of a derailment. The shale boom, if we’re being honest, took us all by surprise, and America’s rail network has been a stopgap measure to help deliver new supplies in far-flung areas to market. But we need to relieve bottlenecks and continue to build out pipelines to these new plays, not just for the sake of the oil boom, but as we’re seeing here, for the sake of rail’s other customers.