BNSF Railway late yesterday disclosed the details of its planned record $6 billion 2015 capital spending plan, with about one-quarter of the investment earmarked for its fast-growing but service-challenged north region.
The Ft. Worth, Texas-based railroad will spend a planned $1.5 billion investment across the eight-state area for engineering maintenance and line expansion projects. The region covers Illinois, Minnesota, Montana, North Dakota, Oregon, South Dakota, Washington, and Wisconsin. It handles the movement of petroleum products largely from the shale oil-rich areas of the Dakotas and Wyoming to refinery facilities, as well as materials that are shipped into the area to support crude oil production. The corridor is also used to ship agricultural and coal products to ports in the Pacific Northwest, as well as consumer goods to and from those ports.
Since late 2013, BNSF's service in the region has been adversely affected by bad weather in the first quarter of last year, surging crude oil production, and a bountiful grain harvest that triggered increased demand for trains to carry agricultural products.
Amy Casas, a BNSF spokeswoman, said today that the railroad's plans will not be altered by a dramatic decline in oil prices that will likely result in many U.S. energy companies curtailing their own capital spending programs. "We fully expect to execute on our 2015 capital expenditure plan regardless of what happens in the short term to certain commodities," she said in an email. "Our capital programs are about investing in our railroad and continuing to position ourselves to meet anticipated future demand."
In BNSF's south region, which includes its high-speed transcontinental route from West Coast ports to Chicago, Kansas City, Fort Worth, Denver, and St. Louis, the railroad said it plans to spend approximately $800 million for engineering maintenance. In BNSF's central region, primarily used to move coal traffic within six states, the railroad will invest approximately $650 million this year.
The amount budgeted for projects may be different than what is actually spent when year-end totals are counted up. BNSF announced its capital expenditure plans, an all-time record for the venerable railroad, in November.
Privately held BNSF is a unit of Berkshire Hathaway Inc., an Omaha, Neb.-based holding company controlled by investor and businessman Warren E. Buffett.