Railroad industry see surges amid New Mexico, Texas oil boom

Traffic is surging in the railroad industry in southeast New Mexico thanks to the oil boom in the state and West Texas.

The number of rail cars traveling through the Carlsbad area almost tripled during the region’s recent oil boom as extraction continued to grow in Permian Basin, the Carlsbad Current-Argus report ed.

Around 150 rail cars daily – or about 4,250 in a month – passed through the Carlsbad Subdivision that runs from Clovis to Loving in November 2016, According to Southwestern Railroads data.

In 2017, the numbers show about 400 cars per day pass through the division, or about 12,000 per month. The jump came as operations shifted from Southwestern to Burlington Northern Santa Fe, or BNSF.

Southwestern Senior Vice President Bruce Carswell said the increase is no surprise amid significant growth in southeast New Mexico’s oil and gas industry.

“It tends to trend with economic cycles,” Carswell said. “A general view is what’s going on in the Permian (Basin) is phenomenal. It’s definitely created a lot more opportunities for other industries.”

Since it took over the region, BNSF has replaced roughly 36 miles (58 kilometers) of rail, as well as over 43,000 ties, switches and bridges, records show.

Twenty-five crossings have been replaced or rehabbed at no cost to the local road authorities, said BNSF spokesman Joe Sloan.

In 2018, the company spent $3.4 billion overall, mostly on rail maintenance and efforts to limit unscheduled outages.

Construction of a third mainline connected Belen to Dalies, and improved traffic and capacity in the area, with 10 miles (16 kilometers) of new track constructed, and five bridges and four grade crossings.

Amarillo, Texas – which Sloan called a “high density” area for the region and a change point for crew – saw 5 miles (eight kilometers) of rail constructed.

Jonathan Green, CEO of CIG Logistics, said his company uses BNSF rail cars extensively in the region, transporting sand for hydraulic fracturing, pipe, crude, diesel and potash.

He said the sand makes up about 60 percent of CIG’s business, a resource necessary to perform hydraulic fracturing – a practice experts said was a major cause of the recent boom in southeast New Mexico and West Texas.

“We needed to get well consumables into that market,” Green said. “The closer you can get to the well, the better. The goal for our business is to be as close as possible. Rail only goes where rail is built.”