BNSF Railway Co. Chairman Matt Rose said expansion of crude-oil shipments is threatened with the commodity’s decline in price, even as a strengthening U.S. economy boosts rail freight. The growth of shale-oil production will slow with crude in the $70 dollar-per-barrel range and will be eliminated in the $60 range, Rose said yesterday at the RailTrends conference in New York. If prices drop into the $50 range, output would decline. “As oil prices come down, the rate of new wells being drilled will fall. I don’t think there’s any doubt about that,� Rose said in an interview. “So the opportunity for more growth goes down as oil prices continue to fall.� BNSF, owned by Warren Buffett’s Berkshire Hathaway Inc. (BRK/A), has benefited from the surge in crude production at shale fields including the Bakken in North Dakota. Shipments of petroleum products climbed 14 percent for BNSF this year through mid-November, outstripping a 5.4 percent gain for autos, the rail category with the second-strongest growth, according to Association of American Railroad data. Crude oil gained 1.3 percent to $75.58 a barrel yesterday in New York. It has declined from a high of $107.73 on June 20. Rail freight rose 4.5 percent in the first three quarters this year. That helped spark a virtuous cycle in which haulers “make money, invest it back in the railroad; make more money, invest it back in the railroad,� Rose said. The surge in oil and grain cargo has strained BNSF’s network, leaving some farmers and coal shippers without railcars and attracting the attention of the Surface Transportation Board, which held hearings on service. The board had ordered BNSF and Canadian Pacific Railway Ltd. to issue weekly service status reports. BNSF, based in Fort Worth, Texas, boosted capital spending to $5.5 billion for 2014 and topped that with the announcement yesterday of a $6 billion plan for next year. The outlays include funds to maintain and expand its network and buy hundreds of locomotives. To contact the reporters on this story: Thomas Black in Dallas at tblack@bloomberg.net; Jennifer Kaplan in New York at jkaplan84@bloomberg.net To contact the editors responsible for this story: Dan Kraut at dkraut2@bloomberg.net; Ed Dufner at edufner@bloomberg.net Dan Reichl, David Scheer

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