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Vol. 18, No. 43 Week of October 27, 2013
Providing coverage of Bakken oil and gas

New rail safety setback

Alberta tanker derailment blow to government order to test crude-by-rail shipments

Gary Park

For Petroleum News Bakken

The Canadian government’s efforts to improve rail safety for the movement of petroleum products got overturned Oct. 19 when 13 tanker cars carrying crude and propane derailed west of Edmonton, with three of them igniting after releasing a fireball.

The accident involving a Canadian National Railway train forced the evacuation of residents in the hamlet of Gainford. No-one was injured, but until the fires have burned out the extent of property damage will not be known.

CN Chief Operating Officer Jim Vena apologized to the residents and promised his company would determine what happened to prevent a recurrence.

It was CN’s third high-profile derailment of trains carrying hazardous materials within a month.

CN spokesman Mark Hallman said the railway’s safety record “has been very solid in terms of its main track derailments over the last year (when they were) the lowest on record.”

He said that more than 99 percent of dangerous commodities reach their destination “without any accidental release.”

But the accident coincided with a pledge by the government of Prime Minister Stephen Harper to introduce new legislation requiring companies shipping crude oil by rail to carry extra insurance.

New labeling requirements

Transport Minister Lisa Raitt also announced the government has introduced new labeling requirements for crude-by-rail shipments, ordering all shippers importing crude into Canada to test their cargoes for volatility and report the results to the government.

It is all part of the Harper administration plan to regain public confidence in the movement of hazardous goods by rail after the July 6 tragedy when a train carrying light crude from the Bakken in North Dakota to the Irving Oil refinery in Saint John, New Brunswick, derailed in the Quebec town of Lac-Megantic, setting off explosions and fires that killed 47 people.

“Our government remains committed to taking action to protect public safety and we will take targeted measures to increase the safety of the transportation of dangerous goods,” Raitt said.

It has yet to be disclosed what caused the cars that derailed in Lac-Megantic to explode and set off fires that destroyed the downtown heart of the town.

Although the government did not indicate when legislation will be introduced or what it might contain, increased insurance stands to take a bite out of railway profits. The government said that while “new economic opportunities” require rail as an alternative to plugged crude pipelines, it is committed to making rail transportation safer.

“As efforts to clean up and rebuild Lac-Megantic demonstrate, railway companies must be able to bear the cost of their actions,” the government said.

“Our government will require shippers and railways to carry additional insurance so they are held accountable. And we will take targeted action to increase the safety of the transportation of dangerous goods.”

Operating license extended

Meanwhile, Montreal Main and Atlantic Railway, the company at the center of the Lac-Megantic disaster, has received another extension to its operating license to Feb. 1, 2014, even though the company is in the midst of bankruptcy proceedings while it looks for a possible buyer.

The Canadian Transportation Agency said MM&A had demonstrated it carries “adequate third party liability coverage” and has reduced the volume of dangerous goods it carries by 80 percent since July 6.

In documents filed in a Quebec court, MM&A estimates environmental cleanup costs at Lac-Megantic will total more than C$200 million, while its third-party coverage at the time of the accident was C$25 million.

MM&A Chairman Ed Burkhardt reiterated that his railway is no longer carrying crude and doubts any crude shippers would want to use MM&A for that purpose.

Wendy Tadros, chair of the Transportation Safety Board of Canada, said in a statement Oct. 16 it is “no longer enough for industry and government to cite previous (rail) safety records or a gradual, 20-year decline in the number of main-track derailments.”

“There has been an erosion of public trust and Canadians require reassurance that action is being taken, that risks are being properly identified and mitigated, and that future movements will be safe.”

To that end, the rail industry will “have to undergo its own seismic shift and address a multitude of issues” that the TSB has been advocating for years, she said.



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The Canadian government’s efforts to improve rail safety for the movement of petroleum products got overturned Oct. 19 when 13 tanker cars carrying crude and propane derailed west of Edmonton, with three of them igniting after releasing a fireball.

The accident involving a Canadian National Railway train forced the evacuation of residents in the hamlet of Gainford. No-one was injured, but until the fires have burned out the extent of property damage will not be known.

CN Chief Operating Officer Jim Vena apologized to the residents and promised his company would determine what happened to prevent a recurrence.

It was CN’s third high-profile derailment of trains carrying hazardous materials within a month.

CN spokesman Mark Hallman said the railway’s safety record “has been very solid in terms of its main track derailments over the last year (when they were) the lowest on record.”

He said that more than 99 percent of dangerous commodities reach their destination “without any accidental release.”

But the accident coincided with a pledge by the government of Prime Minister Stephen Harper to introduce new legislation requiring companies shipping crude oil by rail to carry extra insurance.

New labeling requirements

Transport Minister Lisa Raitt also announced the government has introduced new labeling requirements for crude-by-rail shipments, ordering all shippers importing crude into Canada to test their cargoes for volatility and report the results to the government.

It is all part of the Harper administration plan to regain public confidence in the movement of hazardous goods by rail after the July 6 tragedy when a train carrying light crude from the Bakken in North Dakota to the Irving Oil refinery in Saint John, New Brunswick, derailed in the Quebec town of Lac-Megantic, setting off explosions and fires that killed 47 people.

“Our government remains committed to taking action to protect public safety and we will take targeted measures to