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Railways pick up the slack with oil shipments

November 09, 2012

Pipelines take many years to plan and build and new production is coming on line courtesy of the oil sands. The railways are reacting—shipping oil by rail is CN’s fastest growing business segment.

Canada produces about 3 million barrels of oil per pay: 1.1 million conventional (western Canada), 0.3 million offshore (eastern Canada) and 1.6 million from the oil sands. The fastest growing area is the oil sands.

The large scale pipeline projects have attracted widespread media attention:

Though rail deliveries remain modest for now, the ability to deliver crude by track promises to transform the way oil moves inside this continent, and how it reaches untapped customers. So the railways have responded:


Obviously railways cannot carry the large volume of oil that pipelines can. Yet they have proven nimble coming into a market that did not really exist a few short years ago. Shipments out of the Port of Churchill may provide a boost for the Port and the Hudson’s Bay Railway which is under a pall now that the Canadian Wheat Board’s monopoly over western grain shipments has come to an end.