Amid U.S. Oil Boom, Railroads Are Beating Pipelines in Crude Transport

Railroads are outflanking pipelines in the race to service America’s new oil boom
Photograph by Tristan Spinski for Bloomberg Businessweek

Last October, Kinder Morgan Energy Partners, the biggest U.S. pipeline operator, announced plans to build a 740-mile pipeline from the oil fields of West Texas to a refining hub outside Los Angeles. Dubbed the Freedom Pipeline, the $2 billion project would deliver 277,000 barrels a day of cheap Texas crude to West Coast refineries that had long relied on expensive oil shipped from Alaska’s North Slope or even foreign markets. All Kinder Morgan needed was to get regulatory approval and long-term contracts with large California refiners, including Valero Energy and Tesoro.

To continue reading this article you must be a Bloomberg Professional Service Subscriber.