Transport Minister threatens to prosecute oil shippers that flout federal safety rules

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Transport Minister Lisa Raitt is threatening to prosecute oil shippers caught sending crude by rail without first testing it for safety, calling it "completely unacceptable" if companies are flouting federal rules.

The move comes after an investigation by The Globe and Mail revealed that large amounts of potentially explosive crude are going untested because of a perceived loophole in federal regulations. In the wake of the Lac-Mégantic rail disaster, which killed 47 people in July, Ms. Raitt issued a protective direction this fall requiring companies to test oil before it is shipped and make the results available on request.

The train that derailed in Lac-Mégantic was carrying 72 cars of crude oil that was later found to be more volatile than shippers and railways knew. Investigators from the Transportation Safety Board, which is looking at the causes of the accident, said the oil had been misidentified before it was placed on the train.

The Globe and Mail found that shippers have been exploiting the wording of Transport Canada's order to avoid the cost and time of testing oil.

In a statement issued on Sunday, Ms. Raitt said the protective direction makes it mandatory for companies to test all dangerous goods – including oil – before shipping them. If the shipment originates outside of Canada, the importer is responsible for classification testing, she said.

"Railway safety regulations exist to ensure the safety and protection of the public," Ms. Raitt said. "If these regulations are not followed, we will not hesitate to take whatever course of action is available to us."

Asked what kinds of consequences the industry might face if they are found to be contravening the rules, a spokesman wrote in an e-mail that "we're talking about prosecution." He added other possible consequences include detaining shipments and fines.

Four months after the accident in Lac-Mégantic, Que., industry sources in North Dakota told The Globe and Mail that very little oil is being tested because of the wording of the ministerial directive, which was issued in October. The directive says all oil must be tested before it is shipped by rail. It also says oil must be identified as the most volatile type of dangerous good until it has been tested. Rather than test the oil to see if it should be classified as less volatile, shippers say they are simply not testing the crude.

That means they don't know if the oil is highly explosive or if it carries higher levels of hydrogen sulphide gas, which could make it dangerous to ship and unsuitable to be sent by rail.

"Recent reports that shippers are not testing dangerous goods are troubling and if true – completely unacceptable," Ms. Raitt said.