Distribution costs are higher than they need to be, shipping by rail and truck is not efficient except for local deliveries

  • Rail shipping has been under attack due to the number of explosions and inadequate tanker rail car safety specifications, Canada has already set new standards
  • New tanker rail car specs for the US will ultimately require heavy investments by users
  • Pipelines – if the right specs are used this can be the safest and most efficient means to transport oil and gas
  • Unloading facilities for pipeline transmission is lacking in key states like California; shipping by truck or rail from North Dakota is very costly although one supplier wants to send product by rail to Washington State and then ships it down the coast to California but Washington State does not want a transfer point

World events

  • Negatives are the Russian actions in the Ukraine, general Mideast turmoil
  • Many in the media believe that Russia government has the desire to recover the peripheral territories that were split away from the Soviet Union at the collapse of Communism. Ukraine, Belorussia, Lithuania, Latvia and Estonia still rely on fuel supplies from Russia.
  • There has been little attempt by these countries to realign infrastructure to source supplies from other countries. Russia regards these countries as its own, and it wants them back. Does the seizure of Crimea represent a single step in the road to Russia’s territorial re-assembly?
  • Actions or events in Egypt and North Korea could have profound negative effects on pricing
  • Positive is the significant increase in oil production and export by Iraq