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Canada needs stronger tank cars for the transportation of crude oil by rail, the head of the country’s Transportation Safety Board, Kathy Fox said, as quoted by Reuters. Canada’s oil-by-rail exports are rising and will in all likelihood continue to rise, which has necessitated an earlier switch to hardier tank cars, Fox said.
“We understand that it can’t happen all at once. But we’d like to see it sooner. We do have an ongoing concern that flammable liquids be transported in the most robust tank cars,” the official said.
Canadian crude-by-rail exports jumped to a record in June 2018, exceeding 200,000 bpd for the first time and nearly doubling compared to June last year, Canada’s National Energy Board (NEB) said in its latest crude oil exports data, in a sign that Canadian producers are increasingly using the railroad option to move their crude to market as pipeline capacity out of Canada is full.
This makes the issue with the quality of rail cars all the more pressing. It is also a sensitive issue for Canada after the 2013 oil train disaster in Lac-Megantic. After the disaster, Reuters recalls, the DOT-111 cars used by the derailed oil train were replaced by newer and sturdier ones, the CPC-1232, but these also need to be replaced by even newer ones by 2025. According to Fox, however, this deadline is too far in the future. A recent oil train accident in Iowa may have contributed to the urgency of the TSB’s call.
Oil-by-rail shipments from Canada’s oil sands are rising because of pipeline capacity constraints. These, in turn, are the result of vocal opposition from environmentalist groups, First nations, and the government of British Columbia. Despite statistics showing that pipelines are the safest way to transport crude oil, opponents of the Trans Mountain pipeline expansion, Keystone XL and other already-cancelled pipeline projects, are adamant that there is nothing more dangerous than pipelines, apparently ignoring the issue of oil by rail.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.