Less rail, more pipelines?
From the January Financial Intelligence Report
Oil Drop Hurts Rail Investment
Railroad companies have been prime beneficiaries of the oil – fracking boom, with the likes of Union Pacific (UP) and Canadian Pacific Railway (CP) and others creating the equivalent of “rolling pipelines” with specially built oil trains tha transport crude in large quantities.
In early December, most such rail carrier stocks began to decline as investors noted the hard reality that lower crude prices means less demand for railroad transport.
And now comest one of the first big signs that the oil-fueled railroad boom is over: officials in Utah said they would not move forward with plans to build a 100 mile rail line that would have opend up more of the shale-rich Uinta Basin in the eastern portion of the state. According to the Salt Lake Tribune, transportation authorities in the region noted a price tag of close to $5 billion and decided it would be wiser to pursue other options for now, such as building pipelines or improving highways for continued or expanded trucking of oil.