Pipelines Packed, Rail to Reap Oil Riches
Jun 17th 2013 3:10PM
Updated Jun 17th 2013 4:20PM
With oil pipelines from Canada filled to capacity, how do Gulf Coast refiners secure the heavy crude to produce the profitable diesel and jet fuel for investor rewards? The Keystone pipeline, if ever built, is years and billions of dollars away. Trucks can't possibly handle the entire demand. Saudi Arabian heavy crude arrives on ships but costs more than Canadian crude.
The answer? By rail. And those who build the the petroleum tank cars, retrofit their rails for the increased weight, and build railroad petroleum terminals will reap. Motley Fool Special Ops Advisor Tom Jacobs interviews Bentek Energy's Chris Micsak about the situation and the potential winners.
Enough of the tease! Here's one of the companies the video reveals. With 21,000 miles of track serving two-thirds of the U.S. population, CSX maintains a valuable proprietary asset. Still, this railroad will face difficult obstacles in the years ahead because of a domestic surplus of natural gas and coal's declining popularity, but it will likely pick up crude oil transport because of lack of pipeline capacity from Canada. To help investors better understand how CSX can deal with these challenges, The Motley Fool has released a brand-new premium research report authored by Isaac Pino, Industrials bureau chief and transportation expert. Isaac provides an in-depth look at CSX's competitive advantages, risk areas, and prospects for the future. Simply click here now to access your copy of this invaluable investor's resource. It's in a great position to exploit the need for rail transportation of the heavy crude the Gulf Coast refiners need.
The article Pipelines Packed, Rail to Reap Oil Riches originally appeared on Fool.com.Motley Fool Special Ops lead advisor, and co-author of "What's Behind the Numbers?" Tom Jacobs has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.