Railroad industry officials say they may have a better solution to what to do with excess Alaskan oil than exporting it to Japan.
General American Transportation Corp. (GATX), the nation's largest tank car builder and owner, has proposed to several railroads establishing of tank train fleets that in effect would be oil pipelines would have to be built, the proposed rail sustem would have no additional impact on the environment.
GATX marketing officer Marcus S. Kostolich said that while Congress and the administration are discussing what to do with the excess Alaskan oil over the next few years. Washington officials have ignored "a very viable and economically feasible alternative."
According to officials of the Chicago company, three railroads are in a position to move 200,000 barrels a day of Alaskan oil from Long Beach, Calif., on the West Coast to Texas, where it could be put into pipelines for the Midwest and East Coast. Railroads studying the proposal are the Missouri Pacific, Southern Pacific and Atchison, Topeka & Santa Fe.
Oil tankers would carry the oil from Valdez, Alaska, to California where it would be loaded into a string of rail tank cars interconnected with flexibile hoses so an entire unit of up to 110 tank cars could be loaded and unloaded at a rate of 3,000 gallons a minute.
GATX officers noted that a 20-car tank train would create a 463,000-gallon unit that could be loaded in less than 3 hours and need to be serviced only by a two-man crew. Kesplich said the proposed system is efficient because it uses an existing transportation network.
A similar proposal is being studied by the Burlington Northern railroad, which would carry crude oil from the Pacific Coast to Northwest oil refineries and connections to Middle West pipeline. For exmaple, BN has estimated it could move 30,000 barrels a day from Portland, Ore., to Cutbank, Mont., where an Exxon Corp. refinery is located.
GATX marketing has been directed at oil companies, and final decisions on use of the tank trains will not be made until after the Carter administration sets and official price for the Alaskan crude. The railroad officials believe tank train will end up as competitive in cost with normal pipelines.
Tank trains already are in service. After five years of testing by GATX, Cirillo Bros. Petroleum Co. last year leased 10 cars to distribute fuel from an Albany, N.Y., terminal to major customers formerly served by truck.
In February, GATX announced an agreement to lease 135 tank train cars to Consumers Power Co. of Michigan to move residual oil from Canada to an electric generating station at Essexville, Mich.
Two 60-car trains will shuttle between Sarnia, Ontario, and Essexville over the Canadian National and Grand Trunk Western railroads. Charles E. Coyl, GATX senior vice president, said it is the largest order to date for tank train. The Consumers Power trains will begin service in September.
GATX and rail officials said the tank trains could carry more than 400,000 barrels a day along the Northern Tier routes. They said Northwest and Midwest consumers would benefit from new supplies of oil and several thousand jobs that would be created on the railroads if the plan is fully implemented.