California Crude by Rail Imports at 2-Year Low

California imported 176,203 barrels of crude by rail in February, the lowest single-month level since January 2013, the California Energy Commission said on Tuesday.

The February total is nearly half of the January import total of 342,901 barrels, the CEC said.

For the first two months of 2015, California imported an average of 259,552 barrels by rail per month, down 44 percent from the 2014 monthly average.

New Mexico was the single largest source of crude by rail to California in the first two months of the year, followed by Wyoming and Utah.

Gordon Schremp, a senior fuels specialist with the CEC, said the plunge in crude by rail shipments could be attributed to a shrinking in the price differential between North American crudes and international crudes like Brent North Sea.

"When the size of this discount narrows, (crude by rail) imports to California fall," he said.

California imports of crude by rail have risen sharply in recent years as crude produced in landlocked states has been loaded on tanker cars bound for coastal refineries. California lacks an extensive pipeline network to bring the crude to its refineries, which makes rail an attractive transportation option.

Fiery derailments this year in West Virginia, Illinois and Ontario, Canada, have stoked public concern about the safety of moving crude by rail.

Oil companies have proposed building about 15 crude-by-rail offloading facilities in California. If built, the overall percentage of crude imports to California by rail could rise from about 1 percent last year to 25 percent in the coming years, according to government officials.

Tupper Hull, a spokesman for oil industry lobbying group the Western States Petroleum Association, said he was not sure why the amount of crude moving by rail plunged in February, but said he suspected that low crude prices are making foreign imports a better value than crudes associated with high transportation costs.

Eddie Scher, a spokesman for environmental group ForestEthics, said that despite the crude-by-rail import decline in February, he does not believe oil companies will abandon their plans to build unloading facilities in the state.

Reporting by Rory Carroll