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Canada to move unilaterally to phase out old rail cars

Source: Reuters - Wed, 23 Apr 2014 15:47 GMT
Author: Reuters
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(Adds government decisions, background)

By Randall Palmer

OTTAWA, April 23 (Reuters) - Canada will require that the use of older rail cars for carrying crude oil be phased out within three years, even though the United States has yet to make such a rule change, according to documents seen by Reuters on Wednesday.

The unilateral move is a response to recommendations that followed an investigation into a fiery rail-car derailment in Lac-Megantic, Quebec, last July that killed 47 people.

The change will be among a series of measures the Canadian government will announce later on Wednesday to improve the safety of transporting crude oil by rail, an increasingly common practice in North America, where a shortage of pipeline capacity has forced shippers to find alternatives.

Within 30 days, the government will also prohibit use of the most dangerous of the older tank cars for carrying crude oil or ethanol. The cars are considered dangerous because they lack continuous reinforcement of their bottom shells.

Transport Minister Lisa Raitt suggested earlier this year that Canada would act in concert with the United States to improve rail safety, but appeared now to have decided that a rapid phase-out cannot wait.

"As North America's integrated market necessitates close cooperation, it is important that in the longer term, Canada harmonizes with the U.S. to the greatest extent possible," Canada's Transport Department said on Wednesday in a document seen by Reuters.

"However, in this area, Canada will move more aggressively to address the safety concerns of Canadians," it said, adding that its objective would be to meet or exceed any new standards the United States might develop.

The document is the government's response to recommendations from its Transportation Safety Board stemming from the Lac-Megantic disaster.

The type of cars that derailed and exploded in the center of the small Quebec town last July are known as DOT-111 cars, and are seen as being vulnerable to puncturing and leakage.

Since October 2011, new oil tank cars have been built to a higher standard known as CPC 1232, but many of the older versions of the DOT-111s are still in operation. The Canadian directive said the CPC 1232 standard would be the minimum requirement three years from now.

The Canadian government also said it would issue an emergency directive that would include speed restrictions and higher inspection requirements for the rail carriage of dangerous goods.

The rapid expansion of oil-by-rail and a recent spate of accidents have pushed the issue of rail safety to the forefront. (Additional reporting by Patrick Rucker in Washington and Louise Egan in Ottawa; editing by Peter Galloway)

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