Obama Crony Warren Buffett Raking It In From Transporting Bakken Oil By Rail
If built, the Keystone XL pipeline would take about 100,000 barrels of North Dakota’s Bakken oil per day (to put that into perspective, that’s the equivalent of taking about 500 tanker trucks off the roads a day). But the Keystone XL pipeline isn’t being built as President Obama continues to obstruct the process with regulation.
In the mean time, oil producers have turned to rail to get oil out of the oil patch, which has led to an explosion in growth in the rail industry, which in turn is putting a lot of money in Warren Buffett’s pockets:
Warren Buffett and Carl Icahn are reaping the benefits of surging demand for railroad tank cars to haul shale oil from beyond the reach of existing pipelines.
Buffett’s Union Tank Car Co. is working at full capacity and Icahn’s American Railcar Industries Inc. (ARII) has a backlog through 2014. Trinity Industries Inc., the biggest railcar producer, began converting wind-tower factories last year to help meet demand for train cars that can transport the petroleum product.
All three are getting a boost from a shale-oil boom that’s poised to make the U.S. the world’s largest crude producer by 2020. Rail carloads of crude tripled last year to more than 200,000, and demand for tanks designed for it soared, helping both Trinity and American Railcar outstrip the Standard & Poor’s 500 Index.
“People who want to ship oil can’t get them,” Toby Kolstad, president of the consultant firm Rail Theory Forecasts LLC said, referring to railcars. “They’re desperate to get anything to move crude oil.”
I’ve got no problem with rail, but it’s a more dangerous avenue for transporting oil than pipelines (trains derail more a lot more often than pipelines leak) not to mention more expensive.
It’s hard to see what’s happening here and not think that the fix is in. Obama is roadblocking pipeline infrastructure to manufacture demand for rail capacity.
In related news, remember that Trinity Industries bought out wind industry manufacturer DMI Industries in Fargo. What does Trinity do? In addition to manufacturing wind towers, they make rail cars.