Oil prices rose on Thursday,…
After more than 150,000 job…
Canada’s transportation minister announced on April 23 that the government would phase out controversial oil tank rail cars that have been involved in a series of deadly train derailments and explosions.
The DOT-111 tankers, which have been the predominant model used in the surge in train shipments of crude oil coming from Canada and the Bakken, will be retired from service within three years.
The oil industry has increasingly relied upon rail to move oil to market, as pipeline capacity has failed to keep pace with the rise in production. In 2008, the industry transported only 9,500 carloads full of oil, but by 2013, that number had skyrocketed to more than 400,000.
Due to their lack of reinforced hulls, the DOT-111s have been criticized as unsafe and inappropriate for shipping oil. Most notoriously, the cars were involved in the runaway oil train explosion in Lac-Megantic, Quebec in July, 2013 that killed 47 people.
Several subsequent derailments and explosions in the U.S. have forced American transit officials to take a closer look at the issue. In February, a member of the National Transportation Safety Board said that the rail cars posed an “unacceptable public risk.”
Related Article: Canada Embracing Climate Control Measures to Support Oil Sector
But the Pipeline and Hazardous Materials Safety Administration isn’t expected to issue new rules until sometime later this year, and even when issued, the regulations could take years to finalize. NTSB Chairwoman Deborah Hersman said April 23 that the government needs to act immediately. “We are very clear that this issue needs to be acted on very quickly,” she told reporters after a forum on rail safety. “There is a very high risk here that hasn't been addressed.”
Canada’s move will mean that 5,000 tankers that are the most vulnerable will be immediately removed from operation. Over the course of the next three years, rail operators will have to phase out a total of 65,000 tankers and replace them with new models. That number could represent as much one-third of Canada’s total fleet.
By Joao Peixe of Oilprice.com
Joao is a writer for Oilprice.com