We've noted Bakken Oil can get premium prices on the West Coast before and more crude is making its way that direction. Most of the oil is moving by rail, but it is not being railed all the way to California.

Most of the oil is unloaded at ports in the Pacific Northwest, put on barges, and sent south to refineries. Some is consumed locally.

• Tesoro ships oil from the Bakken to its refinery in Anacortes, Washington.
• Tesoro & Savage are building a 120,000 b/d rail to marine facility in Vancouver, Washington.
• A mothballed ethanol plant that is being used as a Bakken oil terminal in Oregon.

There are other projects that might come to fruition as well. Oil moving west is likely going to be a mainstay in North Dakota and Montana.

In total, there are 10 rail terminals planned or under construction in Washington and Oregon. One Tesoro facility has been completed in Anacortes, WA. Others include:

• 2 in Anacortes, WA
• 2 in Ferndale, WA
• 1 in Tacoma, WA
• 3 in Hoquiam, WA
• 1 in Vancouver
• 1 in Clatskanie, OR

It's an interesting development to watch.

While pipelines are the cheapest, safest, and most efficient way to move crude, rail has become competitive due to price differences around the country and barriers to building pipelines. Pipelines face significant regulatory scrutiny and high initial capital costs.