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Canada to join U.S. safety crackdown on oil shipments

Crews work in the area of derailed tanker cars in Lac-Mégantic, Que., on July 14, 2013. The train derailment and subsequent fires and explosions destroyed much of the downtown area of the picturesque Quebec town.

PETER POWER/THE GLOBE AND MAIL

Transport Canada says it is deploying inspectors to scrutinize crude oil being shipped to Canada by rail, after a Globe and Mail investigation revealed that potentially explosive oil is being sent on trains without companies first checking to see whether it is too dangerous to ship.

Those inspectors will work with U.S. counterparts in a joint effort, Marie-France Dagenais, director general of the Transport Dangerous Goods Directorate at Transport Canada, said Wednesday during a House of Commons committee hearing to discuss rail safety. Responding to a question about The Globe report, Ms. Dagenais said the government intends to zero in on crude-oil shippers, amid allegations they are ignoring Canadian safety regulations.

Ms. Dagenais said the government is following up after new rules were issued this fall requiring shippers to test crude oil.

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"We are actually refocusing some of our inspections," Ms. Dagenais said. Since Canada doesn't have the right to inspect U.S. facilities on its own, she added Transport Canada must work with U.S authorities. "We're going to do it collaboratively to ensure that the proper testing is done," Ms. Dagenais said.

The concerns come after the July disaster in Lac-Mégantic, Que., where a train carrying 72 tankers of crude from North Dakota's Bakken region exploded, killing 47 people and devastating the downtown. That same month, The Globe reported that several warning signs over Bakken crude existed before the Lac-Mégantic disaster, including concerns from pipeline company Enbridge about Bakken oil being unusually dangerous.

On Wednesday, a Canadian government official acknowledged publicly for the first time that Ottawa has safety concerns about crude extracted from the Bakken shale, which straddles North Dakota and parts of Manitoba and Saskatchewan. Despite reports about the volatility of the oil, government officials have until now stayed away from stating that Bakken oil, which is lighter and more susceptible to vaporization than other forms of oil, was riskier to ship.

Gerard McDonald, assistant deputy minister of safety and security for Transport Canada, said the department is now considering whether additional safety protocols are needed for shipping crude oil. "Given the events at Lac-Mégantic, and the concerns over certain types of crude like Bakken [oil], from the Bakken fields, that is something that we will be looking at," he said.

Asked whether the department is taking steps to determine if companies are complying with a recent order issued by Ottawa to test all oil for volatility, Mr. McDonald said Transport Canada is working with officials in the U.S. to target inspections, to ensure oil is classified appropriately. "If we find any contraventions of the order we'll take appropriate enforcement action," he said.

As part of a Globe investigation into the Lac-Mégantic disaster, employees of two companies associated with shipping oil said minimal testing is being done on oil shipped by rail from North Dakota to Canada, even after the deadly derailment. Ken Pritchard, a former hazardous materials inspector for the U.S. Federal Railroad Administration, also said Canadian regulations contain major loopholes, which allow companies to ship oil without testing first to see whether it is too dangerous, and potentially unsuitable, for the rails.

Companies believe they can skip the tests if they simply fill out paperwork that classifies their oil as the most volatile type that is permissible to ship, even if the actual crude is more volatile than that maximum threshold, industry sources say.

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The Commons committee hearing comes a day after the Auditor-General released a highly critical report on Transport Canada's handling of railway safety in Canada. The Auditor-General said Tuesday that Transport Canada completed just a quarter of planned railway safety audits during a recent three-year period, leaving a majority of smaller railways without a proper review. In addition, those audits that were completed were too narrowly focused to provide any real assurance that companies' overall safety plans were being followed.

The Auditor-General's report also found that many of the department's inspectors are poorly trained, too few auditors are employed and there has been limited follow-up with companies when rail-safety concerns were discovered.

Not contained in the Auditor-General's report, however, is the fact that federal regulators have never required shippers of oil to have emergency response assistance plans, or ERAPs, to deal with explosions involving crude.

Such plans are meant to help first responders deal with an emergency involving that product, including making sure they have specialized equipment at an accident site. Ms. Dagenais said the department initially determined which products would require ERAPs based on the kinds of reactions those products can have and the specialized equipment needed to deal with them, such as foam trucks to extinguish intense flames.

Ms. Dagenais said the government is reviewing whether an emergency plan would be applicable "to the new crude oil that is being transported."

Liberal MP David McGuinty said he is concerned by the report that companies are not testing oil before shipping it. "It tells me that there is a serious capacity problem, inside the department, to enforce not just existing regulations and standards, but clearly to enforce a brand new directive issued in the wake of the Lac-Mégantic tragedy."

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About the Authors
Parliamentary reporter

Kim Mackrael has been a reporter for The Globe and Mail since 2011. She joined the Ottawa bureau Sept. 2012. More

Senior Writer

Grant Robertson is an award-winning journalist who has been recognized for investigative journalism, sports writing and business reporting. More

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