UPGRADE 3-Canada to phase out crude-by-rail automobiles early as shipments drop

(Adds background on timing of the modification, remark from Cenovus
and CN Rail) By Allison Martell Canada will take older tank
cars from crude-by-rail service much earlier than originally
prepared, its transportation minister said on Monday, in the
government’s latest relocate to strengthen rail security after a fatal
2013 crash. The choice, which moves Canada’s retrofit schedule further
ahead of the United States, was partially triggered by a sharp drop
in oil rates since 2014 that has cut the volume of crude
carried by rail. “With less vehicles in usage, the market has more capacity to
retrofit existing cars to the existing requirement,” said Delphine
Denis, a spokesperson for Transportation Minister Marc Garneau. Some older tankers, called DOT-111 vehicles, had actually been scheduled
to go out of service on May 1, 2017. A version jacketed with an
extra layer of metal to make it more powerful was set to be phased
out on March 1, 2018. Both types of cars will now be taken out of service by Nov.
1, 2016, Garneau said.

Mishap private investigators have said the vehicles tend to puncture
throughout derailments, in some cases triggering fires. The train that
exploded in the Quebec town of Lac-Megantic and killed 47 individuals
in 2013 was made up of DOT-111 tank cars. Denis said there are about 28,000 affected vehicles in crude oil
service in North America. The modification might decrease risks borne by trains, which
usually can not choose not to ship harmful items.

” CN has actually long promoted for more stringent requirements for tank
cars and continues to highly support the aggressive phase out
of older, so-called heritage DOT-111 tank cars revealed today,”
said Canadian National Railway Co representative Mark
Hallman. Canada’s Transportation Safety Board has actually also raised
concerns about the resilience of tank vehicles that satisfy the newer
CPC-1232 standard.

NO SCARCITY OF CARS The Canadian policy shift will limit the number of vehicles that
can be utilized on cross-border paths. Under a regulation completed in May 2015, the United States
would let DOT-111 cars carry oil in the more unsafe packing
group I classification up until January or March 2018. It would let
crude in the less dangerous packing group II classification be
carried in DOT-111 cars as late as May 2023. Tom Williamson, a Florida-based broker and owner of
Transport Professionals, said the new due dates would not
most likely result in automobile shortages. “I have actually never seen so many offers for leases in my profession.
If we get one request for a lease, I have 15 offers,” he said. Cenovus Energy Inc, which owns the Bruderheim
crude-by-rail terminal near Edmonton, Alberta, has already
phased out the DOT-111s in its fleet and won’t be impacted, said
business representative Brett Harris.

( With extra reporting by Jarrett Renshaw in New york city and
Nia Williams in Calgary; Editing by Jeffrey Hodgson).

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