orangeleader.com (Orange, Texas)

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July 20, 2013

Deadly derailment won't stop oil on trains

(Continued)

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.

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