A Spaceman Visits a Petroleum Analyst

So there I was at the drive-through window, waiting to order my Eleganté Colosochino Frapatelli Insignifiaco medio latte (eat your heart out auto-correct!), which I had budgeted for at $11.50. When suddenly there was a tap on my car window. The tapper explained that he was a spaceman from, well you know, outer space. Apparently the spaceman from inner space couldn’t make it, so he sent the other guy.

Anyway, he told me that he had been sent to earth to find out the most powerful word in any language on earth in order for their impending oil invasion to run more smoothly. Completely un-phased, I answered, “That’s simple, it’s the word, “if.”

Understandably, Martian man wanted some examples, so I happily offered him the following.

IF not for Bakken crude being shipped east by rail, five or six refineries would have closed, which would have resulted in huge job losses and equally huge spikes in fuel prices in the Atlantic pricing basin.

IF not for Bakken crude being shipped by rail to the east from North Dakota perhaps the 47 people who tragically lost their lives in Lac Mégantic would be alive today.

IFby some reversal of insanity there could have been a balance between public safety and commercial viability, under the guidance of political altruism, then neither of the

IFs above would be part of this commentary.

Last week, the U.S. Department of Transportation DOT proposed changes to the crude by rail directives that are not cast in stone, let alone iron, as there is a 60 day commentary period.

Firstly, it is proposed that maximum unit train speeds be reduced from 40 to 30 mph or 64 to 48 km/hr.

IF this is to be, so the rail people say, this will delay shipments of anything from say Chicago to Spokane by six hours. By “anything” we mean politically sensitive agriculture and industrial products such as the political Holy Grail – the sacred automobile.

The U.S. government also recommends that the explosive light end hydrocarbons be stripped from the Bakken crude at the source. North Dakota producers do not have that capability and claim that IF this becomes an official regulation then the Bakken costs will increase dramatically at the well head.

Finally the DOT 111 tank cars will have to be removed from service within two years (all 72,000 of them), and replaced with tank cars with heavier steel. This means increasing tank thickness by an eighth of an inch, to which you might say, “So what’s the big deal?”

Well it is.

Due to an outdated and under maintained rail bed system, tank cars are limited to 286,000 lbs. Increasing steel thickness by an eighth of an inch increases the tare weight by 7,850 lbs and reduces the crude volume by tank car by 3%, ultimately increasing the end delivered price per barrel of Bakken crude. This means that IF there is less volume moving on a 100 tank car train unit then more 100 tank car train units will be needed to satisfy crude supply contracts to eastern refineries.

So the problem doesn’t go away is just gets worse.

None of these problems would continue IF pipelines from the Bakken and Alberta were approved six years ago. But we need the leadership from the leader of the Free World to make the logical decision.

But he won’t make a decision.

I told my space friend that “But” is the second most powerful word used by politicians and added that they are also usually the butt of all jokes.

But with a deeply confused look on his face, he just turned and walked away.

We have a new member in the club!

~The Grouch

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Roger McKnight is the Chief Petroleum Analyst with En-Pro International Inc.
Roger has over 25 years experience in the oil industry, and has held senior marketing management positions responsible for national and international accounts. He is the originator of the card lock concept of marketing on-road diesel that is now the predominant purchase method of diesel in Canada. Roger's knowledge of the oil industry in North America, and pricing structures has resulted in his expertise being sought as a commentator by local, national, and international media. Roger is a regular guest on radio and television programs, and he is quoted regularly in newspapers and magazines across Canada.

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  • What stands out to me is this line.
    (Firstly, it is proposed that maximum unit train speeds be reduced from 40 to 30 mph or 64 to 48 km/hr.

    IF this is to be, so the rail people say, this will delay shipments of anything from say Chicago to Spokane by six hours.)
    So slowing trucks down with speed
    limiters would have the same affect.
    Work six more hours for the same