Oil train derailment in Alberta and gas fracking protest in New Brunswick add to fossil fuel industry woes
Oil train derailment. Fracking protests. A shut-down of a major pipeline hearing. Public relations failures continue to mount for Canada's fossil fuel industry.
CN is currently fighting an unjust dismissal lawsuit by a whistleblower employee in its Memphis, Tennessee yard alleging the company covered up reporting of minor derailments and falsified its performance numbers for freight delivery in order to boost executive bonuses and shareholder value.
The issue of the safety of the class of railway wagons carrying the majority of ethanol, chemicals and petroleum products in North America has come to the fore following the Lac Mégantic disaster. Known as DOT 111, they are single hulled and can be too easily breached when they are involved in a crash or derailment. According to the Railway Association of Canada, there are some 240,000 DOT 111 wagons operating in North American Railroads, of which half have received modification to improve their safety.
That appears to contradict a recent report by NBC News that has the American Railway Association saying about 32,000 DOT 111 wagons carry crude oil in the U.S. and only one quarter of those have undergone modifications. The report also says that according to the Renewable Fuels Association, 63,000 DOT 111 wagons carry ethanol in the U.S. and most have received no modifications.
Arguments are made by some, including in the environmental movement, that the vast fleet should be replaced with double-hulled wagons. Rail companies have resisted that call for many years because of the cost involved (according to some news sources, more than $1 billion). Meanwhile, the U.S. and Canadian governments have bowed to industry pressure to not legislate on the matter.
Since Lac Mégantic, the opposition New Democratic Party in Ottawa has focused its critique of oil train movement on calls for greater safety measures. MP Olivia Chow accuses the federal government of only making vague promises to improve rail safety. She says train and rail line inspections need to be increased and automatic braking systems should be required on all trains. Coincidentally, CBC News is reporting that Transportation Safety Board inspectors say a malfunctioning of an automatic brake system may have caused the Gainford crash.
NDP MP for Edmonton Strathcona Linda Duncan says, “I want this rail shipping to be slowed down until we get a real picture of how safe it is.” She reportedly owns a cabin at Wabamun Lake in Alberta, near where the 2005 CN derailment occurred.
Regardless of the safety record, the profits in railway operations are impressive. CN Rail’s financial results for the third quarter of 2013 were issued on Oct 23 and they show record revenues of $2.7 billion and net profit of $705 million, up from $664 million in the same quarter a year ago. (The other half of Canada’s railway duopoly, CP Rail, is also reporting a record share price and profits--$331 million in the same quarter, on earnings of $1.5 billion. Both railways have extensive operations in the U.S. and are cashing in on the oil-by-rail boom.)
Oil threats in the north
The threat of oil trains extends into Canada’s north. There is intense commercial pressure to open Arctic waters for fossil fuel extraction and transport. Meanwhile, Denver-based Omnitrax has come up with a scheme to ship oil from the Bakken field in North Dakota and Saskatchewan along the old and fragile, former CN line to Churchill, Manitoba, on Hudson Bay. A new export terminal would be built, and from there the product would be transported by oil tanker through sub-Arctic waters to the Atlantic Ocean.
Omnitrax owns the 1,300 km of line that connects The Pas, Manitoba to Churchill. Much of the line is built on permafrost peat that is beginning to break down due to global warming. The company’s oil-by-rail proposal has met a cool reception from the NDP government of Manitoba and was hotly contested at recent town hall meetings in three locales in the province.
But this bizarre rail scheme would fit with the ‘vision’ that Canada’s Conservative government has been pushing for the Canadian north and Arctic ever since it first came to power in 2006. That is to open up the vast and fragile region to fossil fuel and mineral extraction, and to open Arctic waters for ocean transport. Fittingly, and in a dire premonition of the fate of the Arctic Ocean, the first cargo shipment to ever traverse the Northwest Passage occurred last month, consisting of a load of BC coal bound for Denmark.