Oilpatch slowdown good time for new rail standards
Recent fiery derailments have raised fresh questions about the safety of the tank cars used to ship crude by rail, putting pressure on the government to speed up the introduction of new standards. And there may be no better time than the present, as oil’s collapse could perversely make the transition to a new class of cars easier on producers.
Four separate oil trains — two in Ontario and two in the United States — have derailed and caught fire in the past month and in each case the tank cars met what are supposed to be tougher, safer standards. Compared with the older cars that were involved in the deadly Lac-Megantic disaster in 2013, these CPC-1232 cars have thicker steel, safer pressure-release valves and shields that protect the bottom half from punctures.
The railway industry has long supported the introduction of new standards, arguing they will reduce the risk of costly — and potentially deadly — derailments. Even outspoken critics of government regulation such as Hunter Harrison, CEO of Canadian Pacific Railway Ltd., support new standards.
The Canadian Association of Petroleum Producers (CAPP) supports new regulations, but has expressed concerns in the past about the possibility of tank-car shortages as the transition is made. Producers often own their own tank cars, or lease them from middlemen.
But Greg Stringham, vicepresident of oilsands and markets at CAPP, said the recent slowdown in the oilpatch could actually make the transition easier on producers — especially if new pipelines get built.