CN Rail expects crude volumes to grow

Canadian National RailwayCo. says it expects the volume of crude oil it transports to continue growing, even in light of a recent disaster in LacMegantic, Que., that has thrust rail safety into the spotlight.

The railway company said revenue from transporting crude oil increased by 150 per cent during the second quarter from a year ago, driven mostly by new loading stations on its network.

“There is still a likelihood that crude by rail will continue to rise in volume,” chief marketing officer Jean-Jacques Ruest said during a conference call Monday to discuss the railway’s second-quarter results.

CN reported profits and revenue that were up from a year ago, helped by rate increases, higher volumes and the positive impact of the weaker Canadian dollar on U.S.-dollar denominated revenues.

The railway said it earned $717 million or $1.69 per diluted share for the quarter ended June 30, up from $631 million or $1.44 per diluted share a year ago. Revenue totalled $2.67 billion, up from $2.54 billion.

Excluding one-time items, the company says it earned $1.66 per share, up from $1.50 per share a year ago.

The wisdom of shipping oil by rail has come under scrutiny after a runaway train belonging to the Montreal, Maine & Atlantic carrying 72 cars of oil derailed and exploded in Lac-Megantic, Que., killing 47 people earlier this month.

Using railways to carry oil has been a growing part of CN’s business as oil producers faced with limited pipeline capacity look for other ways to get their product to market.

CN Rail and Canadian Pacific Railway both launched reviews their safety procedures in the wake of the Quebec disaster.

“We are analyzing every aspect of what could have gone wrong on the MMA to cause a runaway train situation, and we are also assessing all of our train securement policies,” CN chief executive Claude Mongeau said.