The deadly fire sparked by the derailment of a Montreal,
Maine & Atlantic Railway train is now raising questions over the
transportation of oil within Canada. Sadly, this accident is the fourth
freight-train accident under investigation involving crude-oil shipments since
the beginning of this year. However, as the 6th largest producer of
oil, Canada’s economy depends on this important commodity for trade. Safety
concerns and questions on training in dangerous good handling and transport are
now being raised in the aftermath of the Lac-Megantic, Quebec disaster.
The Canadian Railway Association has long promoted the cost
effectiveness of oil transportation by rail over pipeline. In fact, rail
shipments of oil have greatly increased over the years. According to Statistics
Canada and the Canadian Association of Petroleum Procedures, rail shipments of
oil in Canada have increased from about 6,000 carloads in 2009 to an estimated
14,000 this year.
Industry experts note that even if all the current pipeline
projects were to be granted government approval, there would still not be
enough capacity. In fact, national oil production would exceed pipeline
capacity by one million barrels a day by 2025 and even then that oil would
still need to find a way to reach the coasts. In a recent research note, RBC
Capital Markets noted that if the US decides not to expand the controversial
Keystone project, Canadian oil shipments by rail could increase another 42% by
2017.
Transport Canada, the regulatory authority over Canada’s
railroads, noted that there are 101 train inspectors across Canada and 35
inspectors focused solely on the transportation of dangerous goods. The
authority also noted plans to hire additional inspectors. Another concern is
that it appears the amount of oil being transported through municipalities and
provinces is not shared. This information seems to be held tightly by each
railroad company. And finally, while still under investigation, the president
and CEO of the company that owns the train that derailed and exploded in Quebec
indicated an employee failed to set the brakes. Also, the chairman of the
Montreal, Maine and Atlantic Railway commented the train’s air brakes were
released because firefighters turned off the engine when they extinguished a
small onboard fire, possibly caused by a leaking fuel line, hours before the
derailment.
Lots of finger-pointing is underway as investigation of the
accident gets underway. Regardless of the results, it is likely regulations
will tighten for railroads in Canada. The US is probably watching with keen
interest and could also follow suit and impose regulations as well –
particularly as cross-border activity continues to increase between the two
countries.
