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California’s New “Gold Rush” Might Be Fracking Oil

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Fracking is certainly a controversial subject, and admittedly there are some potential downsides to this method that are worthy of consideration. Still, fracking has helped the United States reduce its dependence on foreign oil, and given the on-going tensions with Russia and the near collapse of Iraq, a steady supply of domestic oil couldn’t come at a better time.

For better or worse, however, California has largely been cut off from oil obtained through fracking. The biggest impediment has been the lack of oil pipelines crossing the rocky mountains. Given that California is a left leaning state, such a pipeline likely won’t be built in the near future, and even if permission was obtained, it’d take years to build the pipe lines.

Now, however, the state looks set to tap into shale oil via railways.

California Looking To Tap Into The Fracking Boom Via Railways

The oil industry has been looking for alternatives and the solution now appears to be the original westward-bound mode of transportation that led to the mass settling of the West in the first place. No, we aren’t talking about horse drawn wagons but instead trains.

Railways offer a great way to ship massive quantities on the cheap. Rails are very energy efficient in comparison to semi-trucks, and rail lines can easily cross all but the most difficult terrain. Unlike ships, which often have to make long circumventions around land masses, rail ways can cut directly across most landscapes.

And yet, only about 500,000 barrels of oil are entering California each month. This might sound like a lot but it actually accounts for only 1 percent of the oil California uses. The problem isn’t space on tracks, but instead a lack of terminals to unload the oil itself.

Oil Companies Looking For Solutions

Oil companies have been trying to solve the problem by building new terminals and oil processing facilities located near rail ways. So far they have faced fierce opposition from environmentalists and others. Recently, however, oil companies have secured a few key victories.

Alon USA Energy was given the green light last month to build the state’s largest oil terminal. When completed the terminal be able to handle 150,000 barrels of oil per day (remember, California is currently receiving only 500,000 per month). Alon is also looking to convert a closed down asphalt plant to start processing some of the oil, but most of it will be shipped to other refineries.

Meanwhile, Plains All American Pipeline will be opening a 70,000 barrel a day refinery this month. This comes after a fierce challenge by environmentalists who had been trying to get the company’s rail permits revoked.

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