Crude oil in Quebec rail disaster was mislabeled

By PAUL VIEIRA and TOM FOWLER

OTTAWA -- The oil carried on railcars that derailed, exploded and killed 47 people in a small Quebec town this summer was a more-flammable liquid than its shippers indicated, Canadian transport investigators said this week, a development that heralds a further tightening of oversight of the booming trade in shipping oil by rail.

The Transportation Safety Board of Canada said its tests showed the oil had a much lower flash point -- the temperature at which a fire can ignite -- than originally indicated on tank-car signage and was more dangerous than identified on the railcars that plowed into Lac-Megantic on July 6.

Because of the inaccurate labeling, the oil may have been put in tank cars that weren't classified as safe enough to hold it, the safety board said, although it added that it hadn't made a final judgment.

The board said it had written to North American regulators asking them to review labeling guidelines for the shipment of dangerous goods. US regulators have been tightening safety standards they apply to rail-tank cars and their use. The findings could also raise more questions of negligence and liability for companies that were involved in shipping the oil from North Dakota's Bakken region into Canada.

The announcement answers a question experts have asked about one of North America's most fatal derailments in decades: How did crude oil, which typically has a high flash point, ignite and explode as it did in Quebec. But it leaves many questions unanswered, not least the exact contents of the cargo and whether correct labeling would have stopped an accident investigators say appears to have started when the brakes on the unattended train were released, sending the Montreal, Maine & Atlantic Railway Inc.-operated train careening into the town.

"We are interested in knowing more about the product," said Donald Ross, the lead Canadian investigator. He said his investigators will continue to test the samples from 11 suppliers they found in the Bakken region.

Investigators said those who supplied and handled the cargo had offered "contradictory" details about the fuel's hazard levels. Dangerous fluids are measured on a scale of 1 to 3, with level 1 being most hazardous. The TSBC said the fuel should have been identified as level 2. The trucks that first moved the oil from Bakken to a rail-loading facility in North Dakota had documents that indicated level 2, but the rail cars that took the cargo on to Lac-Megantic had identified it as level 3.

Canadian investigators are also looking at whether the types of railcars used to ship the Bakken oil are safe enough. This week, they wrote to regulators in Canada and the US, as well as rail- and energy-industry players, asking them to ensure proper procedures are in place to accurately identify dangerous goods.

This month, the US Pipeline and Hazardous Materials Safety Administration said it is reviewing proposals that would force tank cars to be equipped with better puncture-resistance systems, among other measures designed to make them safer.

PHMSA started surprise inspections on Bakken crude shipments in the past month to verify that shippers and rail carriers are properly classifying the oil, said Jeannie Shiffer, its director for governmental, international and public affairs.

In August, the US Federal Railroad Administration said it is concerned that some oil shipments are being transported in tank cars that aren't safe enough. The agency also said it is investigating whether some shipments of crude contain chemicals that make them more hazardous than their classification indicates.

More than 34 million barrels of crude were delivered to US refineries by train in 2012, a fivefold increase compared with a year earlier, said the Energy Information Administration.

The MM&A train was headed to an oil refinery in St. John, New Brunswick, owned and operated by closely held Irving Oil. Investigators said regulations dictate the importer of the goods -- in this case, Irving -- has the responsibility to ensure railcars are properly labeled.

A spokeswoman for Irving Oil said the company is working with authorities as they investigate. MM&A, a unit of Illinois-based Rail World Inc., didn't respond to a request to comment.

A spokeswoman for Canadian Transport Minister Lisa Raitt said in an email that companies that fail to properly identify their goods could face prosecution.

Ms. Raitt's spokeswoman didn't respond to questions on whether Irving Oil could face such penalties.

In Lac-Megantic, residents said the findings came as little surprise. "We knew that the materials in the train were more dangerous than they said in the beginning," said Yannick Gagne, 35 years old, who owned the Musi-Cafe, the downtown bar in which many of the victims were believed to have died.

Mr. Gagne said he believes the oil and railway companies should pay for all the damage. "They destroyed our property, our families," he said.


Dow Jones Newswires

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