US and Canada toughen oil transport rules

The Canadian and US governments have introduced sweeping new rules to make shipping crude by rail safer, nearly two years after a runaway oil train exploded in Quebec, killing 47 people and raising public pressure on lawmakers to take action.

Both countries will be required to phase in sturdier rail cars for crude on a staggered schedule, starting with the oldest and most accident-prone cars that must be replaced within three to four years.

New tank cars must be built with thicker sides and stronger valves to prevent leaks, while older cars must be retrofitted or replaced to meet new standards, with a full transition by May 2025. Tougher brakes for larger cars must also be implemented by 2021.

Canada had previously unveiled its proposal to replace old tank cars by May 2025, but this was the first comprehensive action from the US, after years of disagreement and delays between regulators, operators, manufacturers and safety experts.

Safety groups have criticised Ottawa's 10-year plan, saying change needs to be faster, while the oil industry has pushed back, arguing it is not possible to phase out older cars in a shorter timeframe.

Today's plan seeks to "strike a balance" between safety and the demands of shipping companies, said Lisa Rait, Canada's minister of transport, during the joint announcement with US transportation secretary Anthony Foxx.

The fiery crash in Lac-Megantic, Quebec was the first of a spate of serious accidents from shipping oil by rail, partially reflecting the sharp jump in US crude production.

New production areas, such as the Bakken area and the Eagle Ford shale area in Texas, often lack pipelines to link to refineries, resulting in a 4,000 per cent increase in shipments of crude by rail since 2009.

"We can never undo damage that took place in Lac-Megantic," said Ms Rait. "But we can and must learn from those events and improve our system."

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The American Petroleum Institute, an oil lobby group, said the proposed timeframe for compliance is not realistic.

"The railcar manufacturing industry's own calculations show it does not have the shop capacity to meet the retrofit timeline announced today, which will lead to shortages that impact consumers and the broader economy," said Jack Gerard, president of API.

Recent explosions, including a fire in Ontario and an accident in West Virginia, have sparked greater concern because the cars that exploded were built to new, higher standards introduced in 2011 known as CPC-1232.

Most serious crashes - including the disaster at Lac-Megantic - involved cars built to the older, DOT-111 standard.

Under the new rules, DOT-111s must be retrofitted or replaced by May 2017 in Canada and January 2018 in the US, while CPC-1232s must be phased out by April 2020.

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