Canada toughens liability standards after oil train disaster

AP News
Posted: Feb 20, 2015 8:12 PM

OTTAWA, Ontario (AP) — Canada's railways will have to pay for a disaster relief fund under proposed legislation introduced in response to an oil train explosion that killed 47 people in Quebec in 2013.

The bill, introduced Friday, will create a new $250-million Canadian (US$200 million) compensation fund, to be financed with levies from oil shippers over the next five years.

Transport Minister Lisa Raitt said the legislation will mean any railway or company that ships crude oil will share accountability for cleanup and compensation costs in the event of an accident.

Raitt also said the bill would impose mandatory minimum insurance levels on railways depending on the type and volume of the dangerous goods being transported.

A spokesman for the Canadian Association of Petroleum Producers said the new levy amounts to 25 cents per barrel of oil shipped by rail.

Much of downtown Lac Megantic, Quebec, was destroyed on July 6, 2013, by a raging fire caused when an unattended train derailed and rolled into the town. Several train cars exploded and 40 buildings were leveled. The unattended train had been parked overnight on a rail line before it came loose.

Lac Megantic acting mayor Richard Michaud said the town won't be totally satisfied until there are no more oil trains running through it.

The moves are just the latest regulatory effort to get ahead of a booming oil-by-rail revolution that continues to create disastrous flash points. Earlier this week in West Virginia a train carrying over 11 million liters of crude derailed in an explosion of fireballs, forcing the evacuation of hundreds of families. A fiery derailment also happened in northern Ontario last weekend. No one was killed or injured in either derailment.

The Canadian Association of Petroleum Producers estimates the Canadian rail industry will move 700,000 barrels of Western Canadian oil each day by 2016, up from less than 300,000 barrels in all of 2009.