Updated: New owner of rail line and mayor in Lac Mégantic, Quebec want oil train shipments resumed

By Roger Annis, March 22, 2014

Oil by railIncredible but true. Mayor Collette Roy-Laroche of Lac Mégantic, Quebec wants oil train shipments to resume through her town.  She made the comments at a press briefing on March 19. Below is a translated news report on the matter that appeared in the Sherbrooke, Quebec daily La Tribune.

Oil-by-rail shipments are back on the table following the sale of Rail World’s Montreal, Maine and Atlantic Railway (MM&A) assets to Fortress Investment Group in the U.S. The new owner of the line (now renamed Central Maine and Quebec Railway) was in Lac Mégantic one week ago pressing the mayor to accept the resumption of oil shipments. (According the Portland (Maine) Press Herald, the sale of the rail line to Fortress is going through some last-minute delays.)

Oil cargo is much more lucrative for the railway owner than other products, and there is a ready customer for North Dakota oil at the eastern end of the MM&A line–Canada’s largest oil refinery, owned by Irving Oil and located in Saint John, New Brunswick.

A councilor for Granit, the county in which Lac Mégantic is located, told the daily La Tribune of Sherbrooke, Quebec on March 5 (translation from the original French), “For the new owner, it’s essential to transport oil on our rail line. It’s unavoidable. It’s certain that we will soon see oil through the center of Lac-Mégantic.” Maurice Bernier echoed the expressed desire of the mayor of the town that the reconnection of the rail line be realized by building a new section that would go around the town. But that will cost millions of dollars.

The MM&A line in question is the historic CP Rail line built in the 1880s to connect Montreal and Atlantic Canada through Maine. The line was run into the ground over time by CP Rail and sold off in the early 1990s. A series of short-line operators have owned it since.

La Tribune does not report the reaction of townsfolk to all this news. Nor does it report what, if anything, is being said by the candidates running in the provincial election to take place in Quebec on April 7. An all-candidates meeting for the electoral district of Mégantic was held on March 19. A news report posted to the web page of the Québec solidaire campaign reports nothing of any discussion of the future of the rail line.

Québec solidaire is the left-wing, pro-independence party in Quebec, founded in 2006. The candidate in Mégantic of the incumbent Parti québécois government is the head of the chamber of commerce of the town of Lac Mégantic.

Mayors argue for ‘safe’ oil-by-rail

Mayor Roy-Laroche was recently in Washington DC as part of a delegation of U.S. and Canadian mayors lobbying for regulatory changes to make oil-by-rail appear safer and therefore make it more palatable to a wary public.

The mayors say that regulatory changes in oil-by-rail transport can make it safe. But oil shippers are refusing calls for the only substantive improvement they could make (short of convincing the railways to run trains at low speeds), which is to spend hundreds of millions of dollars to convert their vast fleets of oil tanker cars to double-hull construction.

The railways are also balking at disclosing exactly what dangerous goods they are transporting, in what quantity and when. Last week, CN Rail and the fire service of Toronto refused to divulge the contents of a report the railway had given to the service last December on the movements of dangerous cargo through the city. They were pressured to do so after Hamilton fire Chief Rob Simonds did so for his city, revealing that seven of every 100 CN railcars that passed through Hamilton in 2013 contained dangerous goods.

CN Rail spokesman Jim Feeney says an estimated ten per cent of his railway’s cargo is dangerous goods.

The rail lines from Windsor to Montreal which run through Canada’s largest city, Toronto, are a major point of transshipment to refineries in Montreal, Quebec City and Saint John, New Brunswick of the highly flammable fracked oil from North Dakota and southern Saskatchewan that erupted in a fireball in Lac Mégantic last July 6 and killed 47 people.

Last month, the Montreal Gazette obtained a 33-page copy of a Quebec provincial police search warrant application for MM&A documents. The warrant contained details of circumstances surrounding the July 6 disaster as well as previous safety infractions by the railway. But much of its content is blacked out.

On March 6, the Transportation Safety Board announced the result of a study of the oil contained in the railcars that survived the conflagration at Lac Mégantic. It said the flammability of the oil was comparable to that of refined gasoline.

The business consortium that was transporting the oil from North Dakota included Irving Oil of Saint John, CP Rail and several oil shipping companies. They did not divulge the extreme danger of what they were transporting. In one of its studies last year of the disaster, the TSB said the companies failed to label the product they were shipping as a higher level of flammability than typical crude oil. Railways typically do not own the oil tanker cars that they transport but they are responsible for their safe transport, including accurately labeling the volatility their content.

Some railway owners are falling over themselves to show they are concerned about oil-by-rail safety. This after years of transporting North Dakota oil known to be exceptionally volatile and after a string of fiery crashes across North America since they expanded oil-by-rail on a vast scale. The Association of American Railroads reports that major U.S. railroads delivered 83 per cent more oil in 2013 over 2013–434,042 carloads in 2013 compared to 236,556 in 2012.

CP Rail’s CEO, Hunter Harrison, began singing the safety tune late last year, though he said it’s all up to the oil shippers to make improvements to their railcars. CP is the second largest carrier of North Dakota fracked oil.

This year, Irving Oil and now the Warren Buffett-owned BNSF Railway have announced they will replace their small fleets of oil cars, over time, with ‘strengthened’ versions. These would have shields that better protect valves and the ends of cars in the event of crashes.

Oil trains in White Rock-South Surrey-Delta

Unit oil train northbound through South Surrey BC on Feb 1, 2014, photo Roger Annis

Unit oil train northbound through South Surrey BC on Feb 1, 2014, photo Roger Annis

An unofficial, one-month study by this writer of freight trains moved by BNSF railway to and from the U.S. through White Rock, South Surrey and Delta showed that app. one quarter of the rail cars are transporting oil, propane, chlorine and other dangerous chemicals. The rail line sees an average of six to eight BNSF freight trains, two BNSF coal trains and two Amtrak passenger trains each direction each day.

The freight trains number 110-120 cars. The dangerous cars are typically arranged in several groups, separated by boxcars and lumber cars.

One unit oil train (pictured) was observed during the one month study. It traveled northbound on February 1. The oil cars appeared to be loaded.

You can read about the oil-by-train threat in the U.S. Pacific Northwest in the excellent articles series by the Seattle-based Sightline Institute. The series is called, The Northwest’s Pipeline on Rails. A ten-page report by the same name examining industry plans to expand oil-by-rail shipments and export terminals in the region was published last year and updated in February 2014; read it here.

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Oil could roll through Lac-Mégantic once again, says mayor

By Claude Plante, La Tribune [Sherbrooke, Quebec], Wed. March 19, 2014
(Translation of original article in French.)

Sherbrooke, Quebec–Oil could once again travel by train through downtown Lac-Mégantic, scene of a rail tragedy last year. Mayor Colette Roy-Laroche admitted Wednesday for the first time since the events of July 6, 2013 that cars filled with hazardous materials could potentially pass through the city.

Such a scenario would boost prospects for the transporter, the U.S. investment fund Fortress, future owner of the railway network that passes through the municipality of Lac-Mégantic.

According to Ms. Roy-Laroche, chances are good that the operator will repair the rail network and demonstrate that it can be operate with transparency. It will initially transport non-hazardous materials before adding petroleum materials.

What’s at stake is the economic survival of Lac-Mégantic, the mayor pleaded at a press briefing Wednesday morning [March 19]. She said oil transport remains one of the most lucrative activities of railroad operators.

Last week, Ms. Roy-Laroche met John Giles, president of the Central Maine and Quebec Railway ( CMQR ), the new company that will operate the network of railways of the former Montreal , Maine & Atlantic (MM&A). The CMQR is owned by Railroad Acquisition Holdings, a subsidiary of Fortress Investment Group, a leading investment fund based in New York. Last month, Railroad Acquisition Holdings won the auction for the assets of the MM&A.

Giles made the case that it is possible to transport hazardous materials by rail safely. At least, that’s the commitment that his high-ups are delivering to the municipality, which is still healing from the wounds of the tragedy that struck so violently last summer.

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