Selling agricultural commodities is a kind of dance, with time limits. Once the sale is consummated, the clock starts. The buyer needs it on time, because customers don’t pay for empty shelves.
Food is often perishable – faster is fresher, and fresher is better. Then, with bulk commodities like grain, loaded on ships and sent to the far corners of the globe, there are schedules to meet, and promises to keep. The owners of ships don’t like to see them sitting around waiting for the cargo. Delays due to a shortage of rail cars and trucks means trouble and financial losses.
At this point someone clever might say time is money, because it is. But crude oil is money, too. People want it as much as cherries or apples or wheat, probably more, and they don’t want to wait. Shippers of crude oil are trying to accommodate them. Railroads are jumping into the new oil shipping business in a big way – 434,000 carloads in 2013, up 83 percent in a year. Apples, cherries and soft white winter wheat will have to wait.
The Wenatchee World’s Mike Irwin and Crosscut’s Floyd McKay have chronicled the troubles with the Cold Train Express, which had developed a promising business shipping fruit and other commodities east from the Port of Quincy’s intermodal terminal. The Cold Train suspended service last week. Congestion and delays on the BNSF caused Cold Train customers to cancel many shipments.
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Meanwhile, The Seattle Times reports oil train traffic is delaying grain shipments to Northwest ports. Bulk grain handlers at the Port of Seattle report a major drop in business. The USDA reports grain piling up at elevators, record freight prices, and ships leaving with partial loads or paid to wait.
And for a little bit of irony, energy trend watchers are reporting that coal-fired power plants are running short of coal, it being crowded off the rails by oil shipments, mainly from the Bakken field of North Dakota. Utilities say they may run out this winter.
It is tempting to say that the railroads should get their priorities straight. After all, what’s more important, oil or food?
That is a silly question. BNSF says it is doing the best it can, and that it doesn’t give oil shipments priority, that it is improving is facilities, buying rolling stock, buying locomotives, training hundreds of new employees, and things should be better by September.
We will see. It is probably a good thing to complain about oil and safety and fossil fuel addiction and say we should just keep that stuff in the ground, but that won’t change a thing. The United States is now the world’s third largest oil producer, just behind Saudi Arabia, according to the International Energy Agency. North America – U.S., Canada, Mexico – collectively is the world’s top producer at 15.5 million barrels per day. Repeat: per day.
Most of that is shipped from field to refinery by pipeline, but there’s not enough capacity. The Bakken shale field of North Dakota is so new and so productive that the builders of oil-shipping infrastructure are struggling to catch up. Points out James Conca in Forbes, rail shipments cost more, but it is way easier to build a rail oil terminal than build a new pipeline.
Which is why Tesoro Corp., the oil refiner, hopes to build a crude oil terminal at the Port of Vancouver, to transfer 360,000 barrels a day of mostly Bakken crude from trains to ships and barges, and off to California. That’s half the capacity of the Keystone Pipeline. That’s four mile-and-a-half oil trains per day down the Columbia Gorge.
The proposal awaits state approval. Gov. Jay Inslee may have the final say. Environmentalists are in a fury. But, California has desires.
“Oil-by-rail fight in Washington threatens California gasoline prices,” said a Reauters headline last month.
When California gasoline prices are at stake, it’s hard to get attention for cherries, apples and wheat.
Tracy Warner is a Wenatchee World columnist. He can be reached at email@example.com or 509-665-1163.