How many barrels in a railcar

As of September, there was enough crude storage capacity in the U. However, U. Crude-by-rail shipments were not economic when oil prices were high but are expected to rise as prices have plunged. Loadings out of the Permian basin, the biggest in the country, slumped to about 12, barrels per day bpd in January, the lowest in at least a year, before rising to about 13, bpd in February, according to data from Genscape.

With fears that the world is so overflowing with crude oil that markets will literally run out of places to put it, attention has turned to another option to hold it: railcars. Storage is sought not only because the world is producing far more oil than it needs as a result of the collapse in demand — a drop so steep that consumption is declining to levels not seen since , according to the International Energy Agency.

But storage is also sought because of the math of prices going out into the future. Storage had been running about 50 cents per barrel per month.

But as Ernie Barsamian, the king of storage economics at his storage brokerage firm The Tank Tiger, said, the biggest problem now is finding places to put the oil. Crude oil typically travels in cars called DOTs. Each car carries roughly 30, gallons of crude oil.

When that crude oil is processed, a little under half — 13, gallons — of it will become gasoline you can put in your car. Notley has said Alberta needs to buy as many as 7, tank cars to meet its goal of shipping an additional , barrels of oil a day by train.

She has also said that could include about 80 locomotives, with each train pulling to cars. The province likely won't buy the cars, but instead lease them for between three and five years, which experts say is the industry standard. The government also wants to sign agreements with railway companies and secure capacity to load oil in Alberta and unload the trains at destinations in North America.

In the third quarter of , railcar manufacturers received orders for 11, new tankers, according to data from the Washington-based Railway Supply Institute RSI. About 3, new cars were produced in that quarter and the backlog of orders now sits at about 31, The shortage of tank cars is partly the result of Canada and the U. Some rail companies are also retrofitting the older tank cars to meet the new safety standards in North America.

The shortage is one reason why Alberta will likely have to pay a premium to secure the thousands of tank cars it wants.