Bloomberg News

CP Chief Emphasizes Humans’ Role Over Rail Rules in Crude Safety

February 18, 2014

Safety in shipping crude oil, a railroad-industry focus as petroleum cargos surge, pivots on employees’ actions and not government rules, Canadian Pacific Railway Ltd. (CP) Chief Executive Officer Hunter Harrison said.

“The statistics all say that 85 to 90 percent of accidents are caused by human behavior,” Harrison said today in a speech in Calgary, where Canada’s second-largest railroad is based. “But we spend 85 to 90 percent of our time talking about regulations.”

Oil-train derailments capped by the July disaster in Lac-Megantic, Quebec, that killed 47 people, are spurring regulators in the U.S. and Canada to consider stricter rules. Crude-related incidents surged 12-fold from 2010 to 2013 as oil cargos rose, U.S. government data show.

Moving crude by rail isn’t a decisive business for Canadian Pacific, Harrison said in an interview after speaking to Calgary’s Chamber of Commerce. Less than 5 percent of Canadian Pacific’s revenue comes from oil, said Harrison, 69, who became CEO in 2012 after running Canadian National Railway Co. (CNR), the country’s biggest operator, from 2003 through 2009.

“We live up to the rules and regs, and I pray every night that there are no incidents,” Harrison said. “Having said that, I want to make it clear that the success and the future of Canadian Pacific is not tied to crude at all.”

Trains are shouldering more transport duties as U.S. and Canadian output has risen -- reaching about 11.6 million barrels a day last year -- because there aren’t enough pipelines out of major producing regions as hydraulic fracturing taps previously unreachable reserves.

Canadian Pacific carried 90,000 carloads of crude last year, almost seven times the railroad’s 2011 volumes. Last month, Chief Marketing Officer Jane O’Hagan reiterated a forecast for an increase to as many as 210,000 barrels by the end of 2015.

To contact the reporters on this story: Jeremy van Loon in Calgary at jvanloon@bloomberg.net; Frederic Tomesco in Montreal at tomesco@bloomberg.net

To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg.net


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