Economy

Canada Transport Ministry Fast-Tracks Crude Oil Rail Car Phase-Out

By Irina Slav - Sep 20, 2018, 9:30 AM CDT

Canada’s transport ministry will fast-track a phase-out of two models of rail cars for the transportation of crude oil and condensate as oil exports by rail hit record levels, the Minister of Transport Marc Garneau said in a statement.

The phase-out will involve all DOT 111 tank cars and unjacketed CPC 1232 cars—cars without thermal protection—and will take place by November this year, instead of April 2020, for unjacketed CPC 1232 cars that carry crude, and by January 2019, instead of April 2025, for DOT 111 cars and COPC 1232s for condensate shipment.

The move has been prompted by the strong increase in oil and condensate shipments by rail as Canada’s pipeline network is insufficient to handle the increased production, which necessitated, as per the statement the removal of the “least crash-resistant rail tank cars for crude oil and other dangerous goods” sooner than initially planned.

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 because pipeline capacity out of Canada is full.
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By Irina Slav for Oilprice.com

Canada changing rules for crude oil rail shipments

September 24, 2018

Oil-carrying rail tank cars that are the least crash-resistant will be removed from Canadian tracks 17 months sooner than originally planned under a new move by the Canadian federal government. ... Last week, Transport Minister Marc Garneau announced the federal government has moved up the deadline for removing from the rails some of the most dangerous rail tank cars carrying crude oil and other hazardous materials, Kallanish Energy reports.

CPC 1232 tank cars that are unjacketed or do not have heat protection layers will be barred from carrying crude oil, effective Nov. 1. The deadline had been April 1, 2020. ... That directive affects 21,367 unjacketed CPC 1232 rail rank cars, Transport Canada said. ... In addition, the new order phases out DOT 111 tank cars and unjacketed CPC 1232 tank cars that carry condensates. ... That deadline moves from April 30, 2025, to Jan. 1, 2019.

The changes were part of Protective Directive 39. “We are amending those timelines because we want to use the safest possible containers to transport dangerous goods as soon as possible,” Garneau told the Canadian media. ... “Phasing out these least crash-resistant tank cars as soon as possible is another concrete step our government is taking to enhance the safety of communities along our railway lines and to ensure rail continues to provide a reliable method of transportation for our products and commodities,” he said in a statement. ... On Nov. 1, 2016, Canada had banned DOT 111 tank cars from crude oil service.

Garneau also announced an industry-led working group would be established to make recommendations to Transport Canada on how to speed up the timeline for phasing out CPC 1232 tank cars with a layer of heat protection. ... Canada’s decision to ban certain rail tank cars comes five years after the deadly 2013 derailment in Lac-Megantic, Quebec. A total of 47 people died after a runaway train derailed and exploded.