The Alberta bitumen industry is panicking because of the huge price discount [by as much as $50US per barrel] for their product compared to the US benchmark West Texas Intermediate price.
The main culprit according to producers is a supply glut caused by pipeline bottlenecks due largely to government-imposed delays in new pipeline construction: notably Trans Mountain, and more recently Keystone XL. Curiously companies did not seem to have incorporated these uncertainties into their production plans.
The oil companies also blame high taxes and overregulation for their woes, which is ironic in light of the federal government’s willingness to purchase Trans Mountain and underwrite the pipeline’s expansion.
To compensate for these bottlenecks and help reduce the price disadvantage, the industry is turning to rail.
To boost oil-by-rail volumes in an already overloaded railway system, the Canadian Association of Petroleum Producers is once again urging the federal government to step in, this time to purchase tank cars.
But how safe is the transportation of unconventional crude oil by rail? Have the lessons of 2013 Lac-Mégantic rail disaster been learned?
As I document my book, The Lac-Mégantic Rail Disaster, Public Betrayal Justice Denied, it was the violent consequence of a series of policy and regulatory decisions over three decades, which cumulatively eroded safety protections, subordinating government’s primary obligation to protect its citizens to private interests.
The current transport minister, Mark Garneau, touts the rail safety improvements that have been made since the tragedy. But they are modest at best, and major gaps remain.
The Transportation Safety Board recently released figures showing a 21% increase in runaway trains [uncontrolled movement] in the three years since Lac-Mégantic compared to the previous five years. This at a time when oil by rail is now at record levels and is expected to reach as much as 500,000 barrels per day in 2019, almost three times the volume at the time of Lac-Mégantic.
Securement issues have clearly not been fixed and remain a danger. Furthermore: satellite-based remote control systems to monitor and stop unwanted movements, and advanced electro-pneumatic braking systems—have not, under industry pressure, been mandated by the government.
Companies continue to resist addressing long-standing worker fatigue problems— a factor in lac-Mégantic. Bakken shale and bitumen continue to be transported in a form that leaves their volatile components intact.
The rail safety regulatory regime [Safety Management Systems] has been fraught with problems since it was introduced 17 years ago. It remains, in practice, company self-regulation— an oxymoron — and is still on the TSB Watchlist of safety risks.
Transport Minister Garneau has touted his recent accelerated elimination timetable for one class of unsafe tank cars. But another, slightly safer version of those cars [CPC-1232 jacketed], will be able to carry crude oil until 2025. Disturbingly, a derailment and spill of diluted bitumen in Iowa last spring involved a retrofitted version of the new advanced tank car standard [TC-117].
Underlying these risks is an under resourced and compliant rail safety agency still captured by regulated industry, which exercises disproportionate power to write the rules, shape, block, dilute or delay regulations that they deem adversely affect their costs.
The Canadian public’s safety continues to be compromised by the priorities of the oil and rail industries. The window is still open for history to repeat itself.
Bruce Campbell is the author of “The Lac-Mégantic Rail Disaster, Public Betrayal Justice Denied,” published by James Lorimer & Co, 2018. He is currently adjunct professor, York University, faculty of environmental studies.