Oil boom, demand for railcars aid Berkshire unit

Print
Font Size:
Default font size
Larger font size

Posted: Monday, January 7, 2013 12:00 am

Warren Buffett and Carl Icahn are reaping the benefits of surging demand for railroad tank cars to haul shale oil from beyond the reach of existing pipelines.

Buffett’s Union Tank Car Co. is working at full capacity and Icahn’s American Railcar Industries Inc. has a backlog through 2014. Trinity Industries Inc., the biggest railcar producer, began converting wind tower factories last year to help meet demand for train cars that can transport the petroleum product.

Union Tank Car, based in Chicago, is one of about 140 businesses within the Marmon Group, which is a subsidiary of Buffett’s Berkshire Hathaway Inc. of Omaha.

All three railcar companies are getting a boost from a shale-oil boom that’s poised to make the United States the world’s largest crude producer by 2020. Rail carloads of crude tripled last year to more than 200,000, and demand for tanks designed for crude soared, helping both Trinity and American Railcar outstrip the Standard & Poor’s 500 Index.

“People who want to ship oil can’t get them,” Toby Kolstad, president of the consultant firm Rail Theory Forecasts LLC said, referring to railcars. “They’re desperate to get anything to move crude oil.”

Copyright ©2014 Omaha World-Herald. All rights reserved. This material may not be published, broadcast, rewritten, displayed or redistributed for any purpose without permission from the Omaha World-Herald. To purchase rights to republish this article, please contact The World-Herald Store.


loading...

SPOTLIGHT »

Inside Business
To submit an announcement for "Inside Business", click here. For questions call (402) 444-1371 or e-mail announcements@owh.com.

World-Herald Alerts

Want to get World-Herald stories sent directly to your home or work computer? Sign up for Omaha.com's News Alerts and you will receive e-mails with the day's top stories.