Crude Oil

Background Information on Crude Oil


North American production of crude oil has boomed in the last five years.  This boom has helped to position the United States as the leading producer of crude oil in the world, surpassing the net output of Saudi Arabia. Much of the boom is from production areas in North Dakota and Montana in the U.S. and Manitoba and Saskatchewan in Canada from a shale oil region known as the Bakken formation.

In the absence of pipelines from the Bakken formation, much of this newly produced crude is transported along “virtual pipelines” by railroads to refineries and ports across the country. Domestic shipments of crude oil by rail have grown from 9,500 train car loads in 2008 to 407,642 loads in 2013, an increase of over 4,000 percent, according to the American Association of Railroads. This growth includes Canadian tar sands oil, which is shipped across the U.S. by rail to Gulf Coast refineries, as well as refineries in Canada.

However, the boom in crude oil transportation has also raised serious public safety and environmental concerns due to the inherent volatility of Bakken crude, the sheer volume being transported and recent derailments involving fires, explosions and water contamination. During this boom, there have been multiple crude-by-rail accidents in North America that resulted in damage to property, the environment and catastrophic loss of life. New York State is one of at least 35 states grappling with the impact of this boom and that number could rise.  Although there are currently no facilities within New York State refining this crude oil, as much as 1,000 miles of the state’s 4,100-mile rail network is part of this virtual pipeline.   This network goes through communities in 21 counties, including Buffalo, Syracuse, Utica, Albany and Plattsburgh and nearly all of the state’s major waterways.