Boomtowns on the prairie, young men heading west to find work as roustabouts—there’s an undeniable throwback quality to the American shale oil industry. The 21st century economy was supposed to be driven by Silicon Valley and Wall Street; instead it’s being pumped out of the ground in North Dakota and Texas. That’s creating growth in unlikely places.
Trains, for example. Much of the shale oil is coming from parts of the U.S. and Canada that don’t have the infrastructure to pipe it to refiners, so it’s going by rail. That’s good news for railroads, and it’s really good news for a sector of the American economy most people never think about: companies that make and lease tank cars.
Tank cars, those torpedo-shaped rail cars built to carry liquids, anything from milk to industrial chemicals, are increasingly being used to carry shale oil. “The traffic has grown significantly, from probably 50,000 carloads a year in 2010 to over 700,000 this year,” says Toby Kolstad, president of the consulting firm Rail Theory Forecasts. “It probably will rise above a million carloads a year in the next year or two.”