Surging demand to ship crude oil on trains across the United States is keeping workers busy in Saginaw.
One of our photographers recently spotted lines of new railroad tank cars lined up behind the Trinity Industries facility off U.S. 287 north of Saginaw, near one of the Dallas-based manufacturer’s Tarrant County plants.
Trinity’s Rail Group, with plants in Saginaw and Longview, has a growing backlog of orders from railroads and shippers that need more tank cars to move oil from shale fields in North Dakota and West Texas. In an earnings announcement late last month, Trinity said it received orders for 9,880 cars in the second quarter and has a record backlog of 45,350 units.
The boost in oil-by-rail business has bolstered Trinity’s bottom line. The Rail Group posted a record operating profit of $176 million in the second quarter on record revenue of $895.6 million. Overall, Trinity Industries — which also makes barges, highway products and wind towers — nearly doubled its profit in the second quarter and recently split its stock.
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Trinity officials have been tight-lipped about their Tarrant County operations, declining to respond to our inquiries about the plant. Last year, The Dallas Morning News reported that Trinity’s employment in Saginaw had doubled to about 450, and the Longview News-Journal recently called Trinity the city’s largest industrial employer, with nearly 1,900 employees.
With domestic oil production still growing, demand for tank cars is only expected to increase. And it looks as if shippers will need to replace older tank cars, viewed as vulnerable after a series of derailments that resulted in fiery explosions. Last month, the Transportation Department proposed a two-year phase-out of older tank cars as regulators work to establish new specifications for stronger cars.
“We’re actively investing capital in our rail business in response to growth opportunities,” D. Stephen Menzies, Trinity’s group president over the rail businesses, said in a conference call with analysts.
As a leading rail car manufacturer, Trinity is also caught up in fallout from deadly tank car explosions. According to filings with the Securities and Exchange Commission, Trinity made 35 of the 72 tank cars carrying crude oil involved in the July 2013 derailment in Lac-Megantic, Quebec, that left 47 people dead. The train was reportedly left unattended and rolled into the small town, where it derailed and exploded.
Trinity was named as a defendant in lawsuits filed by the estates of the accident victims, but the company said in a recent SEC filing that “we do not believe at this time that a loss is probable.”
Low T’s CEO says he had signed contract with school
We heard back from Mike Sisk, founder and CEO of Southlake-based Low T Center, late Friday about the decision to cancel a deal, announced a week ago, to advertise at the Marcus High School football stadium.
Although a school district spokeswoman said the deal was never approved, Sisk said the company had a signed contract calling for placing multiple advertising panels around the Marauder Stadium. He attached a copy of a contract signed by the high school principal and a $60,000 check written to the football team’s booster club as proof.
Nonetheless, Sisk said the company decided to back out after “it became very evident that the district was getting some pushback.”
“Speaking to Coach Stanford, we discussed the importance of our sponsorship not becoming a distraction and was more than willing to cancel the contract,” he wrote in an email.
Karen Permetti, a spokeswoman for the Lewisville school district, said Friday that the advertising plan was abandoned after both sides met Thursday and decided it was not “the right fit.”
Low T operates 50 centers in 11 states to diagnose and treat men with low testosterone. But the marketing deal apparently raised some eyebrows given that testosterone is listed by the University Interscholastic League as a banned substance for high school athletes.
Sisk said that Low T’s top priority is to educate men on the importance of knowing their testosterone levels, and that the company thought the football stadium would be a good marketing venue.
“Coach Stanford and my team vetted this with the booster club to gauge the parents’ response because we did not want any negative publicity to us or Marcus High and it was met with overwhelming approval,” Sisk wrote.
A phone call would have been nice
Reno Mayor Lynda Stokes is happy, but surprised, that the Texas Railroad Commission is taking steps to improve regulation of disposal and injection wells in areas where seismic events have occurred.
Reno, as you might remember, has been an earthquake center recently with residents questioning whether the rash of rumblings late last year was caused by activity related to hydraulic fracking of natural gas wells.
At a meeting Tuesday, the commission said it was publishing proposed rules that would, among other things, require drillers seeking a permit to provide information on the history of nearby seismic activity as recorded by the U.S. Geological Survey. The proposal would also allow the commission to suspend or terminate a permit if seismic activity occurs near one of the wells.
While calling it a good first step, Stokes did not know until after the proposed rules were adopted that there were any proposed rules to adopt. Since it is something Stokes advocated for, she said, a phone call before the meeting might have been nice.
“They were very quiet about what they were doing and I’d think they would want us to know,” Stokes said. “This is something I asked about from the start. Why aren’t you asking for studies from people who want to drill wells when you know there are fault lines in the area?”
“I think it is a step in the right direction, but it is just a step. I think we have miles to go yet,” she added. “The sad thing is that they didn’t do this out front and now they have to rein in these companies and that is hard to do when they are at a full run.”
Stokes said she is sure the city will take advantage of the public comment period — those interested have until Sept. 29 to do so.
Folks interested in joining Stokes and the city of Reno in letting the commission know how they feel can do it several ways. One is to send an email to email@example.com (just mention that it refers to O&G Docket No. 20-0290951). You can also call Leslie Savage, the RRC’s chief geologist in the oil and gas division, at 512-463-7308. — Max B. Baker