Are crude-by-rail’s days numbered?

Why Ottawa’s plans to tighten rules can’t come soon enough

Ottawa’s plan to tighten the rules for railroads shipping oil can’t come soon enough, it seems. Transport Minister Lisa Raitt said in mid-December that Transport Canada bureaucrats are drafting a new regime, to be submitted by the end of January, that would treat crude oil as a highly dangerous cargo, as opposed to merely flammable. Since she made the announcement there have been two more accidents that have resulted fireballs and flames.

The latest incident is still unfolding in Plaster Rock, N.B., where a train operated by Canadian National Railway derailed and burst into flames Tuesday evening. CN has said 16 cars came off the tracks, including four carrying propane and four carrying crude oil.  The inferno forced the evacuation of 150 people. In late December, another crude-fueled explosion shook North Dakota after a train hauling soybeans went off the tracks, putting it in the path of another train carrying oil from the Bakken region. Hundreds were evacuated.

Among the issues Transport Canada is looking at is whether railroads have sufficient disaster-response capabilities, and whether crude oil from the Bakken region, which tends to be lighter and more volatile, is being properly tested and labelled by shippers. However, it’s unclear whether the new rules would have prevented the spate of recent incidents.

The industry found itself under increased scrutiny last summer after a crude-laden train slipped down a hillside and exploded in the centre of Lac-Megantic, Que., killing 47.

Call for new rules are also mounting south of the border, with former North Dakota governor George Sinner recently calling the growing number of exploding railcars a “ridiculous threat” to communities across the country. In November, yet another train hauling Bakken oil derailed and exploded in Alabama.

The railroad industry says it’s safety record is already impressive, with 99.9 per cent of dangerous goods shipments arriving at their destinations safely. But critics say the sheer volume of oil now being transported by rail—in the U.S. railroads carried 234,000 car loads of crude in 2012, compared to 5,912 five years earlier, according to the Wall Street Journal—means the absolute number of accidents is bound to increase, and that it’s only a matter of time before another Lac-Megantic-like tragedy occurs. Author and former CIBC World Markets chief economist Jeff Rubin recently told Maclean’s that “one of these days an explosion is going to happen in Chicago or Toronto” and that it will “change the whole nature of the equation.”



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