Do Ya' Think I’m Waxy? - Will Waxy-Crude-by-Rail Support Uinta Basin Production?

RBN Energy Blogcast

There’s a lot to like about the unusual, waxy crude oil produced in the Uinta Basin in northeastern Utah. Low production costs, minimal sulfur content, next-to-no contaminants, and favorable medium-to-high API numbers. Oh, and there’s plenty of the stuff — huge reserves. The catch is that waxy crude has a shoe-polish-like consistency at room temperature, and has to be heated into a liquid state for storage and transportation. As you’d expect, refineries in nearby Salt Lake City are regular buyers; they receive waxy crude via insulated tanker trucks. They can only use so much though. Lately, a couple of Gulf Coast refineries have been railing in occasional shipments of waxy crude, but getting it onto heated rail cars involves a white-knuckle tanker-truck drive across a 9,100-foot-high mountain pass to a transloading facility. Now, finally, crude-by-rail access from the heart of the Uinta is poised to become a reality, offering the potential for much easier access to distant markets and, possibly, a big boost in Uinta production. In today’s blog, we provide an update on waxy crude and its prospects.