N Dakota oil boom creates railcar shortage for US chem distributors

09 November 2011 23:27  [Source: ICIS news]

BONITA SPRINGS, Florida (ICIS)--The US chemical industry is labouring under a railcar shortage as a result of the oil boom in North Dakota, a major chemical distribution executive said on Wednesday.

Randy Velarde, president and founder of US-based petrochemical and polymers distributor The Plaza Group, said: "The [chemical distribution] industry is suffering [because of]… a shortage of railcars. We need more rail cars."

But it is doubtful, he added, that extra rail cars will be constructed in time to help the industry.

Velarde spoke on the sidelines of the 40th annual meeting of the National Association of Chemical Distributors (NACD).

Companies involved in the oil boom in North Dakota have established long-term contracts for rail cars, creating "a shortage for chemical distributors," he said.

Another attendee at the NACD meeting said the North Dakota projects need roughly 8,000 rail cars per month. The NACD meeting runs 7-10 November.

By: Ivan Lerner
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