USA upgrades oil by rail regulations, why not Canada?

Canada lagging on oil by rail regulations?

Transport Minister Lisa Raitt is being left in the dust by her American counterparts and her lack of action could have serious consequences for Canadian towns and cities as oil by rail transport continues to expand.

oil by rail
Lisa Raitt, Canadian Transportation Minister.

On Friday, US transportation officials introduced new regulations requiring oil by rail trains to slow to 40 mph through “high impact” urban areas and to inspect car wheels more thoroughly in an effort to prevent derailments. There were also a few minor regulation upgrades, such as stricter labelling of hazardous materials.

The move came after far too many derailments of oil by rail trains that resulted in fire and explosions. The worst by far was the July 2013 derailment in the heart of the Quebec town of Lac Megantic that incinerated over 30 buildings and killed 47 people. Since then, there have been several close calls in northern Ontario.

Because rail transportation through Canada and the USA is tightly integrated – for instance, the Lac Megantic explosion was involved crude oil from the Bakken in North Dakota – officials on both sides of the border have been working together to find a solution to the problem of “bomb trains.”

The Americans have taken a sensible two-pronged approach.

oil by rail
Oil by rail trains coming under much closer scrutiny from Canadian and American regulators.

In the short-term, they have mandated via regulation what many of the railroads were doing anyway. The moves were generally greeted positively by the industry.

“The added federal directives build on the many practices and protocols the industry has applied for years for safely moving and handling hazardous materials by rail, including flammable liquids,” said Edward R. Hamberger, CEO of the Association of American Railroads.

In the medium to long-term American regulators are working with their Canadian counterparts on new standards for tougher oil tanker cars. The old DOT 111 standard, which comprised 80 per cent of the Canadian fleet and 69 per cent of the American, was simply too flimsy to withstand the impact of a derailment without leaking. All it takes is vapour from light crude and an ignition source – not hard to find when metal cars and track are crashing at 60 mph – to generate a fireball.

oil by rail
Edward R. Hamberger, CEO of the Association of American Railroads.

As Hamberger noted, railroads “anxiously await the federal government’s final rules on tank cars, which directly addresses the heart of mitigation.”

Canada’s Big Two – Canadian Pacific and Canadian National – appear to be voluntarily adopting the new safety practices. CP had not responded to a Beacon media request by publication time, but CN did: “Based on safety risk mitigation policies recently implemented proactively, CN already fully complies with such speed restrictions and other requirements in both Canada and the U.S.,” CNR spokesperson Mark Hallman said in an email.

But Canadian regulators appear to have not followed the Americans by enshrining voluntary railroad practices into regulation. There have been no announcements by Transport Canada, which had not provided requested information at the time of publication. CP also did not respond to an interview request.

Most days, I’d argue a priori that Canadians can probably be confident Canadian Pacific and Canadian National are strictly enforcing their voluntary oil by rail safety practices. Big public companies, after all, have a lot to lose if customers and investors lose confidence in it.

Several fiery derailments in northern Ontario suggest otherwise. The Transport Safety Board pointed to “various infrastructure and track maintenance issues” as the likely culprit in the crashes. CN recently announced a $500 million track upgrade program for Western Canada, responding to a 50 per cent increase in freight movement over the past five years, but no word on investments in track maintenance designed to avoid derailments similar to those in northern Ontario.

oil by rail
Oil by rail derailments and explosions seem to be becoming more common.

And what about the dozens of short-line companies across the country? After all, it was the short-line Montreal, Maine and Atlantic Railway that was responsible for the Lac Megantic disaster. The MMA and two of its employees were charged with 47 counts of criminal negligence and the Transport Safety Board recommended that regulators take a much more hands on approach to ensure procedures are actually being followed.

Can short-lines be trusted to voluntarily adopt tougher new procedures?

Since it doesn’t appear the stouter tanker cars will be available in large numbers until 2025, and the risks of oil by rail accidents can be devastating, wouldn’t more oversight rather than less be the prudent action by Canadian regulators?

The Transport Safety Board certainly thinks so. “If older tank cars, including the (upgraded cars), are not phased out sooner, then the regulator and industry need to take more steps to reduce the risk of derailments or consequences following a derailment carrying flammable liquids,” it said in preliminary comments on the March 7 Gogama derailment.

It’s time for Raitt and Transport Canada to step up. Railroads have made some steps in the right direction. But the Canadian public needs to be assured everything possible is done to avoid another Lac Megantic tragedy.

The Americans have taken an important step by beefing up their regulations, Canada should do the same. And the sooner the better.

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