NEW YORK —
Shipping crude by rail is roughly $5 to $10 per barrel more expensive than shipping it by pipeline. But pipelines require refiners to enter into long-term contracts for delivery.
Last month Kinder Morgan Energy Partners shelved plans for a pipeline that would move crude from Texas to California because key refiners such as Valero Energy and Tesoro preferred getting crude by rail.
Dean Acosta, a spokesman for Phillips 66, said the temporary fall in the price advantage won't change the company's plans for new rail yards in New Jersey or Washington. "It leaves you a lot of different options," he says.