Five ways energy change is transforming US railroads

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A Union Pacific locomotive amid wind turbines. Photo by Photos by Clark/Flickr.

The crude oil business has lifted other train traffic in surprising ways. Railroads carry renewables, too. Trains are fuel-efficient, but is all this new traffic cutting carbon emissions, or increasing them?

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March 16, 2015

By Marianne Lavelle
The Daily Climate

U.S. railroads have not hauled so much crude oil since the short period at the dawn of the petroleum age, when John D. Rockefeller relied on trains to build his Standard Oil empire.

But the long, black tanker trains are only the most visible way that the changing U.S. energy picture is transforming railroads. The fracking revolution has brought other business to railroads, from pipes to propane, and more change is underway.

Since railroads are relatively energy efficient—one gallon of diesel fuel can move one ton 450 miles by train—increasing use of railroads could be a positive step for curbing greenhouse gases. But it remains to be seen whether the new growth of U.S. railroads, intertwined as it is with growth of energy production, is a force for cutting carbon dioxide from the atmosphere, or adding to it. 

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 Fracking and sands

Crude oil is not only rail's fastest growing single commodity, it is the linchpin of an enterprise. Railroads have gained new business hauling a variety of materials needed in hydraulic fracturing, including pipes, chemicals, cement, and most notably, industrial sand, which is shot down into wells to keep shale fractures open. The commodity category that the railroads call "crushed stone, sand and gravel," which includes frack sand, was up 12 percent in 2014 to 1.2 million carloads. 

Norfolk Southern's chief executive told one rail journal last year that the carloads the railroad is handling that are related in some way to fracking are roughly equivalent to the carloads of coal that it has lost due to dropping demand.

And an effort is underway to haul even more crude oil by rail. In California, there are a half dozen planned terminals and other infrastructure projects to ease imports of crude oil by rail from both North Dakota and the Canadian oil sands. The California Energy Commission projects that crude oil-by-rail imports into the state could increase from 6.3 million barrels to 150 million barrels by 2016. 

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Ethanol

Because of ethanol's alcohol content, it can't travel in ordinary oil pipelines. So the railroads have been the chief means of shipping the corn-based fuel alcohol alternative from distilleries in the Midwest since the ethanol boom began more than a decade ago. For several years, the railroads have been shipping about 300,000 carloads a year of ethanol. 

Currently, there's a practical limit on how much can be shipped domestically, because of the longtime limit of 10 percent ethanol in most cars sold in the United States. But newer cars can stand more ethanol, and there's been a regulatory battle underway to more effectively lift the limits and pump more ethanol into the U.S. fuel supply, since capacity is available. But even if an expanded U.S. market doesn't materialize, ethanol makers aim to sell their renewable fuel overseas, and will call on rail to ship it to port.

Railroads also ship dried distillers' grain, a by-product of ethanol production used as animal feed.

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Wood pellets

The U.S. South has become a major source of wood pellets for Europe, as it seeks to meet its goal of 20 percent renewable energy by 2020. Europe's rules favor wood pellets that are carried by railroad, because of their energy efficiency relative to transportation by truck. The railroads don't report separate figures on wood pellet shipments, but Wood Resources International LLC reports that wood pellet exports from North America to Europe doubled in two years, to 4.7 million tons in 2013, and exports from the South were running 10 percent higher than the prior year in early 2014.

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Passenger rail

Efforts to save energy also are spurring greater use of railroads. Commuter trains were one of the main factors lifting public transit ridership in 2014 up to levels not seen in 58 years, according to the American Public Transit Association. APTA said public transit ridership increased since 1995 at almost double the rate of population growth. Commuter rail ridership increased by 2.9 percent in 2014, with the 16 percent increases in Salt Lake City and Stockton, Calif. and 10 percent increases in Seattle and San Carlos, Calif.

However, in some places, the tracks may be at their limit. Amtrak has cited congestion due to increased freight train traffic for its chronically late service between the rail hub of Chicago and Cleveland. Seventy percent of Amtrak's service is on tracks owned by the freight railroads.

Consumer Goods

In sheer number of cars, the greatest boost to the U.S. railroad fleet last year was the addition of 665,630 "intermodal" containers. That marked a 5.1 percent increase to 17.3 million containers for shipping of consumer goods, from clothing to toys. Typically, the boxes are offloaded at ports and transferred to trucks at special terminals.

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The railroads have promoted themselves as an alternative to trucking, which shippers can use to avoid highway congestion and to save energy. For instance, Norfolk Southern says its $2.5 billion "Crescent Corridor" project now underway can remove more than 1.3 million long-haul trucks from roads between Louisiana to New Jersey, reducing 1.9 million tons of carbon dioxide annually. A new $30 million intermodal center under construction by the Jacksonville, Fla. port authority, funded by state and federal grants, is aimed at cutting truck traffic. BNSF says its proposed Southern California International Gateway intermodal yard will reduce the need for trucks to haul containers on I-710.

Imports have driven much of the U.S. intermodal rail shipping in recent years, but railroads also are hoping for a much-discussed rebound in U.S. chemical and consumer goods manufacturing, driven by the fracking boom and abundant natural gas—a feedstock for petrochemicals and plastics.

 Marianne Lavelle is a staff writer for The Daily Climate. Follow her on Twitter: @mlavelles

Photos (from top:) Oil train by Peter Prehn/Flickr. Train tracks lead into an ethanol plant in New Marcus, Iowa, by keeva999/Flickr

Wood pellet photo by U.S. Department of Agriculture/Flickr. Photo of Utah Transit Authority train by Jim Maurer/Flickr. Photo of JAXPORT intermodal cargo center groundbreaking ceremony, May 2014, at Dames Port, Fla., by JAXPORT, Meredith Fordham Hughes/Flickr.

The Daily Climate is an independent, foundation-funded news service covering energy, the environment and climate change. Find us on Twitter @TheDailyClimate< or email editor Brian Bienkowski at bbienkowski [at] EHN.org

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