Are oil trains being used as mobile storage facilities?

mark s posted:

Was thinking with the huge Russia-Saudi oil price war and the greatly reduced amount of driving occurring during our self-imposed quarantining, there must be a huge amount of un-processed crude oil floating around. Saw a Bloomberg article saying "in a world awash in crude oil, oil storage companies are king". I bet that oil tanker ships are anchored off-shore, filled with oil, for storage. And my thought is that railroads can't just park oil trains in greatly reduced capacity yards - that they must keep them rolling.

Anyone have any industry  reconnaisance or thoughts on this situation?

Possibly on all the unused sidings in industrial areas that now mainly use trucks for shipments? Looks like a lot of pellet hoppers sitting in areas long term sometimes.

VLCC ((very large crude carrier) charter rates have jumped from  $22,000.00USD in Feb. to over $300,000.00USD per day in March. The current shortage of vessels has brought todays bid to $420,000.00USD per day.

Gunny

They are storing oil in everything they can, they literally are awash in oil, so it wouldn't surprise me if they used oil tanker cars to store it, they are using tankers in drydock, tankers that are on a scrap heap, you name it. In some cases they are paying people to take away the oil. 

If a petroleum tank car carries 25,000 gallons(595 barrels) you're going to need a lot of tank cars for one day's production from BP in Whiting which produces a million gallons each day, 365 days per year.

I would not call it impossible that some tank cars could be loaded with crude oil and staged for early use at refineries.  However, there are two challenges that reduce likelihood of long-term tank car storage:

1. The proper kind of tank cars must be used.  Just any old tank car will no longer comply with restrictions for loading crude oil.
2. The cars cannot be stored in a populated neighborhood and must be guarded against theft and vandalism.

Most tank cars are also not properly outfitted for long term storage. Many different grades of raw crude that are shipped by rail may contain a high paraffin content and may turn into wax bricks while they're sitting. Many at site storage tanks require steam coils to keep the oil in a liquid state.

The Oil companies will just shut in the oil and gas wells when the price of oil and gas is less than the cost to get it out of the ground.

The oil and gas has been in the ground for a few million years, so a few days, weeks, months, years the well is shut in does not make a big difference.

Most wells It is good to give it a rest.  Builds back up near bore bottom hole well pressure.

P.S. I retired after 30 years with a major oil/gas company. ( not the company in the picture)

The picture is of a gas well having a production zone perforated.

Pump it back into the ground at the location you need it.  We did that in Oklahoma.   I would say that trying to store oil in containers above the ground is a pricey endeavor.  If it were a profitable situation the oil companies would be doing it.  Right now you're looking at a same day 17% margin before costs.  Once you factor your costs in over two months your at a loss.

Best to leave it in the ground.  The upcoming recession could last much longer than your desire to build facilities and pay storage costs

I've not seen or heard of any loaded tank trains being stored.

To much liability to let a hazmat train set like an oil train to just set around. I know LP gas cars set around for long periods of time , but like mentioned oil is a different product when not refined and most likely only placed in tanks cars until needed.