BNSF announces capital spending for 2015

[CHamilton]

More work on the Hi-Line.

BNSF outlines $6 billion Capital Expenditure Program for 2015

BNSF 's planned capital expenditures for 2015 will be $6 billion, which will go toward maintenance and expansion of the railroad in order to meet the expected demand for freight rail service.
The 2015 plan marks the third year in a row that BNSF has committed a record amount for capital investments. BNSF also updated its planned capital expenditures for 2014, which now are expected to be $5.5 billion. Since 2000, through the end of 2015, BNSF will have reinvested more than $50 billion into its equipment and its network and infrastructure for maintenance work that helps to maintain train traffic fluidity and capacity expansion projects intended to meet customers' growing freight shipment demands....

The largest component of the 2015 capital plan will be for the renewal of assets and maintenance, which is expected to cost $2.9 billion. These projects will go toward replacing and upgrading rails, ties and ballast that are due for updating. Track replacement projects typically make up the largest percentage of BNSF's annual capital projects and will optimize its rail network for ideal speeds.

BNSF also plans to spend almost $1.5 billion on expansion projects. Nearly $500 million of that expansion work will occur in the Northern Region, which is where BNSF is experiencing the fastest growth.

 

[oregon pioneer]

So, if I read this correctly, about 1/12 of their capital expenditure next year will be on "expansion projects... in the Northern Region, which is where BNSF is experiencing the fastest growth."

Can't wait to see the results!

 

[montana mike]

The Locals say BNSF is still waaaaaay behind the actual system needs. Three years of "benign neglect" by their new masters at Berkshire Hathaway have caused them to scramble big time to try to catch up. It will be at least another two years before BNSF considers the Hi-Line under control.

BTW-One of the senior "suits" spoke to some BNSF employees recently and stated flat out that rail is now and will be for decades the primary method of moving oil from MT and ND-with or without any pipeline.

 

[Anderson]

The Locals say BNSF is still waaaaaay behind the actual system needs. Three years of "benign neglect" by their new masters at Berkshire Hathaway have caused them to scramble big time to try to catch up. It will be at least another two years before BNSF considers the Hi-Line under control.

BTW-One of the senior "suits" spoke to some BNSF employees recently and stated flat out that rail is now and will be for decades the primary method of moving oil from MT and ND-with or without any pipeline.

This doesn't surprise me. The main issue is that the heavy crude coming from the region simply does not play well with pipelines.

 

[PRR 60]

The Locals say BNSF is still waaaaaay behind the actual system needs. Three years of "benign neglect" by their new masters at Berkshire Hathaway have caused them to scramble big time to try to catch up. It will be at least another two years before BNSF considers the Hi-Line under control.

BTW-One of the senior "suits" spoke to some BNSF employees recently and stated flat out that rail is now and will be for decades the primary method of moving oil from MT and ND-with or without any pipeline.

This doesn't surprise me. The main issue is that the heavy crude coming from the region simply does not play well with pipelines.

The Bakken crude from North Dakota and Montana is among the lightest being produced in the world at about 40 API gravity degrees. Crude oil with API of 31.1 or greater is considered "light." It is about the equal or better than benchmark light crude oil from the North Sea and West Texas. The API gravity scale is inversely related to the density. The higher the number, the lighter the oil. In comparison, the oil weight from the Alberta tar sands is about 10 - very heavy. That crude requires some processing to make it flowable.

 

[Anderson]

The Locals say BNSF is still waaaaaay behind the actual system needs. Three years of "benign neglect" by their new masters at Berkshire Hathaway have caused them to scramble big time to try to catch up. It will be at least another two years before BNSF considers the Hi-Line under control.

BTW-One of the senior "suits" spoke to some BNSF employees recently and stated flat out that rail is now and will be for decades the primary method of moving oil from MT and ND-with or without any pipeline.

This doesn't surprise me. The main issue is that the heavy crude coming from the region simply does not play well with pipelines.

The Bakken crude from North Dakota and Montana is among the lightest being produced in the world at about 40 API gravity degrees. Crude oil with API of 31.1 or greater is considered "light." It is about the equal or better than benchmark light crude oil from the North Sea and West Texas. The API gravity scale is inversely related to the density. The higher the number, the lighter the oil. In comparison, the oil weight from the Alberta tar sands is about 10 - very heavy. That crude requires some processing to make it flowable.

That's borderline puzzling...though I will say that if BNSF was able to secure some long-term pipeline-or-no-pipeline contracts in the region, it would explain their bad behavior with the rest of their customers.

 

[Ispolkom]

The Locals say BNSF is still waaaaaay behind the actual system needs. Three years of "benign neglect" by their new masters at Berkshire Hathaway have caused them to scramble big time to try to catch up. It will be at least another two years before BNSF considers the Hi-Line under control.

BTW-One of the senior "suits" spoke to some BNSF employees recently and stated flat out that rail is now and will be for decades the primary method of moving oil from MT and ND-with or without any pipeline.

Was this one of the senior executives whose benign neglect of the Hi Line led to the present situation? BNSF in the past severely underestimated demand, so it wouldn't surprise me if it turns out that now they're overestimating it. Of course, I'd be happy if they invest too much, as any improvement to the Hi Line that helps the Empire Builder is in my personal interest.

That's borderline puzzling...though I will say that if BNSF was able to secure some long-term pipeline-or-no-pipeline contracts in the region, it would explain their bad behavior with the rest of their customers.

My impression is that it's hard to get producers to commit to anything long term, hence the problems financing pipelines. I'd doubt that BNSF is any more successful getting long-term commitment to their more expensive serivce. In any case bad service to captive shippers has always been a tradition on the Hi Line. It was true a hundred years ago when the Nonpartisan League called for state seizure of the Great Northern, and it's true today. The only thing that improves service is competition, and with CP just as swamped, I don't see where that will come from.

 

[NW cannonball]

The Locals say BNSF is still waaaaaay behind the actual system needs. Three years of "benign neglect" by their new masters at Berkshire Hathaway have caused them to scramble big time to try to catch up. It will be at least another two years before BNSF considers the Hi-Line under control.

BTW-One of the senior "suits" spoke to some BNSF employees recently and stated flat out that rail is now and will be for decades the primary method of moving oil from MT and ND-with or without any pipeline.

Was this one of the senior executives whose benign neglect of the Hi Line led to the present situation? BNSF in the past severely underestimated demand, so it wouldn't surprise me if it turns out that now they're overestimating it. Of course, I'd be happy if they invest too much, as any improvement to the Hi Line that helps the Empire Builder is in my personal interest.

That's borderline puzzling...though I will say that if BNSF was able to secure some long-term pipeline-or-no-pipeline contracts in the region, it would explain their bad behavior with the rest of their customers.

My impression is that it's hard to get producers to commit to anything long term, hence the problems financing pipelines. I'd doubt that BNSF is any more successful getting long-term commitment to their more expensive serivce. In any case bad service to captive shippers has always been a tradition on the Hi Line. It was true a hundred years ago when the Nonpartisan League called for state seizure of the Great Northern, and it's true today. The only thing that improves service is competition, and with CP just as swamped, I don't see where that will come from.

had to laughbad service to captive shippers has always been a tradition on the Hi Line.

Ancient dead monopolist JJ Hill ( still his "COMPANY" has control over a few thousand people and his successors or assigns own most land anywhere near the Hi-line)

We live with ancient robber barons, even now.

 

[CHamilton]

BNSF breaks down planned track maintenance, capacity expansion projects for 2015

BNSF Railway Co. yesterday announced details about major track maintenance and capacity expansion projects that are part of its record-setting $6 billion capital spending budget for 2015.

Overall, the railroad plans to spend $2.9 billion this year to renew and maintain assets, including $1.5 billion for expansion projects. The 2015 capital maintenance program calls for completing 270 bridge projects, laying 950 miles of relay rail, installing 3.5 million ties, and performing ballast, undercutting and/or surfacing work on 21,600 miles of track....

In its North Region, BNSF plans to spend $1.5 billion on infrastructure maintenance and capacity expansion projects in eight states, of which about $700 million is allocated for projects designed to expand lines and implement positive train control (PTC). The region has experienced the most rapid growth in recent years and accommodates the movements of agricultural products and coal to export facilities in the Pacific Northwest, petroleum products to refineries, and consumer products to and from Pacific Northwest ports, BNSF officials said. The region also is a destination point for materials that support the production of crude oil in the Bakken Shale.