Bakken behind rise in oil-by-rail shipments

Crude oil production from North Dakota is more than the U.S. pipeline network can handle, forcing refiners to use rail, a federal report said Thursday.

The Energy Information Administration said in a daily briefing the amount of oil and petroleum products shipped on the U.S. rail system increased more than 10 percent year-on-year.

"Rising U.S. crude oil production, particularly in North Dakota's Bakken shale formation, where pipeline takeaway capacity is limited in moving the state's growing oil volumes to market, is one of the main reasons for this increase in rail shipments of petroleum and petroleum products," EIA said in a daily briefing.

North Dakota's government said oil production in August, the last full month for which data are available, was 1.13 million barrels per day, an all-time high. More than 90 percent of that production came from the Bakken reserve area.

The oil focus for rail means slower movement for other commodity groups. EIA said federal regulators are "closely tracking" U.S. freight railroad traffic.

U.S. Sen. John Hoeven, R-N.D., hosted representatives from BNSF Railway to press for improvements in the state's rail infrastructure in order to relieve the backlog of agriculture shipments.

BNSF this year agreed to invest $400 million in North Dakota rail capacity.