Bloomberg News

CN Rail Cars Burning as Alberta Residents Remain Evacuated (1)

October 21, 2013

Canadian National Railway Co. (CNR) cars are still burning and residents remain evacuated today after an derailment Oct. 19 west of Alberta’s capital Edmonton.

CN Rail began a controlled burn of propane last night in the rural hamlet of Gainford, Warren Chandler, a CN Rail spokesman, said in a media briefing today. He declined to provide a timeline for completion and said the company’s main east-west rail corridor remains shut as the company investigates.

“It is our hope in the very near future to have some good news for these residents,” Chandler said. “It’s too early to speculate on a cause at this point.”

The derailment of 13 CN cars, nine of which contain propane and four carrying crude, comes as regulators boost scrutiny of oil transport by rail in Canada and the U.S. The industry is drawing heightened attention after a train carrying oil jumped the tracks and exploded in Lac-Megantic, Quebec, in July, killing 47.

There are 126 evacuees registered as displaced, who won’t be allowed to go home until it’s safe, Jackie Ostashek, a spokeswoman for Parkland County, said at media conference on Global News today.

Railroads are facing new rules that may raise costs as energy companies move more oil on trains amid delays in building new pipelines such as TransCanada Corp.’s Keystone XL from Alberta’s oil sands to the U.S. Gulf Coast. Across the continent, trains are forecast to move as much as 2 million barrels a day by the end of 2014, according to Calgary-based pipeline operator TransCanada Corp. (TRP)

Shares Fall

“We run a safe railroad, but we do have incidents,” CN Rail Chief Operating Officer Jim Vena said in a news conference on the weekend, according to a video posted online by Parkland County.

CN Rail shares fell 0.4 percent to C$109.39 at 3:16 p.m. in Toronto, after touching an intraday record of C$110.05 shortly after the open. The stock has gained 21 percent this year.

CN Rail’s weekend crash in Gainford followed the derailment last week of a CN Rail train carrying anhydrous ammonia in Sexsmith, Alberta and a derailment last month of a CN Rail train that sent 17 cars off the track, one of them leaking oil, in Landis, Saskatchewan. There were no injuries in each of the incidents.

Fuel Spill

In 2005, CN Rail spilled 1.3 million liters of bunker fuel into Wabamun Lake, Alberta, about 5 kilometers (3 miles) east of Gainford, when 43 cars derailed on the railway’s main line through western Canada.

A Canadian Pacific Railway Ltd. (CP) train carrying so-called diluent, a light petroleum product used to dilute oil-sands bitumen, also derailed last month in one of the Calgary company’s rail yards, less than three months after a bridge holding a CP train carrying diluent buckled over the flooded Bow River.

Vena apologized to residents and defended CN’s record, calling 2012 its safest year.

Since 2005, track accidents on CN’s network have declined by 69 percent, CN said, basing its assessment on Transportation Safety Board of Canada criteria.

Visual Inspection

Emergency responders on the weekend evacuated Gainford and the surrounding area and the county declared a state of emergency, after officials were notified of the derailment about 90 kilometers west of Edmonton.

The 134-car mixed-freight train was traveling from Edmonton to Vancouver, Vena said. The track involved in the derailment had been tested to standards surpassing those set by Transport Canada and faced “no issues,” Vena said. The track was visually inspected Oct. 17, and the train was inspected before it left Edmonton the next day, he said.

Investigators with Canada’s Transportation Safety Board have begun identifying the cause of the derailment and potential contributing factors by interviewing crew and collecting electronic data, James Carmichael, a senior investigator, said at the weekend media briefing.

To contact the reporters on this story: Rebecca Penty in Calgary at rpenty@bloomberg.net; Jeremy van Loon in Calgary at jvanloon@bloomberg.net

To contact the editors responsible for this story: Susan Warren at susanwarren@bloomberg.net


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