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Train carrying crude oil explodes in Quebec

Hydrocarbon Engineering,

A runaway train carrying crude oil has exploded in the Canadian town of Lac-Megantic. The death toll from Saturday's blast stands at five; there are fears it will rise further as 40 people are missing.

The train was carrying the crude oil from the Bakken Field in North Dakota.

Train cars uncoupled and rolled down the tracks to Lac-Megantic

The Montreal, Maine & Atlantic train was parked in the village of Nantes - about 7 km (4 miles) from Lac-Megantic - during an overnight driver shift-change, said a company spokesman.

A driver had parked the train and put the brakes of its engines on before going to a local hotel for the night, said the spokesman, Joe McGonigle. But the fuel cars somehow became uncoupled, causing them to roll downhill into the town and derail, he added.

Tragic incident

The fuel-carrying train cars uncoupled from five locomotive engines around 01:00 on Saturday, gathering speed as they rolled down the tracks before derailing in Lac-Megantic.

Eyewitnesses said that by the time the cars reached the town they were travelling at considerable speed.

The pre-dawn explosion sent a fireball and black smoke into the air, destroying dozens of buildings and forcing the evacuation of 2000 people.

A lakeside town that is home to some 6000 people, Lac-Megantic is close to the US border with Maine and Vermont, and is 130 miles north of Maine's capital, Augusta.

Some 30 buildings have been incinerated in the historic centre of the town, which is some 250 km (155 miles) east of Montreal, in Quebec.

More bodies were recovered on Sunday, raising the death toll to five.

Fires were still preventing rescuers reaching part of the 73 car train on Sunday, and billowing black smoke could still be seen long after the derailment.

Transporting oil by train

Montreal, Maine & Atlantic owns more than 800 km (500 miles) of track serving Maine, Vermont, Quebec and New Brunswick.

Edward Burkhardt, the President and Chief Executive of Rail World, the parent company of Montreal, Maine and Atlantic Railway, said the decade-old railroad had had a very good safety record.

Because of limited pipeline capacity in North Dakota's Bakken region and in Canada, oil producers are using rail to transport much of the oil to refineries on the east, Gulf and west coasts, as well as inland.

Canada's Prime Minister, Stephen Harper, has called rail transit "far more environmentally challenging" while trying to persuade the Obama administration to approve the controversial Keystone XL pipeline from Canada to the Gulf coast.

The Quebec accident is likely to have an impact across the border in the US. In Maine, environmentalists and state officials had previously raised concerns about the threat of an accident and a spill from railroad tank cars carrying crude oil across the state.

The Montreal, Maine and Atlantic Railway carried nearly 3 million bbls of oil across Maine last year. Each tank car holds some 30 000 gallons (113 600 litres) of oil.

Pipeline debate spurred

The disaster also promises to touch off debate over the safety of shipping crude oil by rail or pipelines such as TransCanada Corporation’s Keystone XL. The cargo was part of Canadian producers’ growing use of rail amid tight pipeline capacity.

As authorities began investigating the explosion of the refinery-bound tank cars, Quebec’s Green Party demanded stricter regulations and an energy industry association predicted tough scrutiny ahead for rail carriers.

“People think rail is costless until something like this happens,” said John Stephenson, fund manager with First Asset Investment Management Inc., from Toronto, where he helps manage Cdn$ 2.70 billion (US$ 2.65 billion). “This is another data point that shows how much costlier and riskier rail is compared to pipelines and will probably move Canada closer to having an energy strategy.”

“It’s been a real shame that a lot of the public and especially the activists have pushed the public to sway so much from pipelines which are likely much, much safer over time,” said Arthur Salzer, Chief Executive Officer of Northland Wealth Management, which oversees Cdn$ 225 million. “It is going to be something that’s going to weigh on the public’s mind.”

Increased rail shipments planned

Canada shipped about Cdn$ 73 billion (US$ 69.3 billion) of oil exports last year, mainly to the USA. With the industry waiting for a decision on the Keystone XL pipeline by President Barack Obama and from Canadian regulators on approval of Enbridge Inc.’s Northern Gateway route through British Columbia, more shipments by rail are being planned.

“There will be some very hard questions that will be asked about why an unmanned, parked train moved,” said John Herron, President of trade group Atlantica Centre for Energy in Saint John, New Brunswick. He said that attention is “more than appropriate” with plans in the works to increase oil-offloading capacity on the eastern seaboard by 840 000 bpd.

Without the Keystone XL, designed to carry 830 000 bpd, rail shipments of Canadian crude would rise an additional 42% by 2017, according to an April 2013 report by RBC Capital Markets. Cenvous Energy Inc. plans to boost rail shipments fivefold to 30 000 bpd by the end of 2014 to help reach coastal markets.

“Pipeline companies will use this to point out the advantages and safety records of pipelines,” said Bob Schulz, a professor at the University of Calgary’s Haskayne School of Business, in an interview. “It gives those companies an additional point to support their argument.”

The Natural Resources Defense Council, a Washington-based environmental group, said it was inaccurate to assert that the Keystone XL pipeline was “something that can save us from oil on rail.”

“Rail will continue, and its safety problems can’t be ignored,” Anthony Swift, an Energy Analyst with the group, said.

Previous rail incidents

In 2005, Canadian National Railway spilled 1.3 million litres of bunker fuel into Wabamun Lake, Alberta, west of the provincial capital Edmonton, when 43 cars derailed on the railway’s main line through western Canada.

More recently, a Canadian Pacific train carrying diluent used to dilute oilsands bitumen almost collapsed into the Bow River, one of Canada’s best trout-fishing rivers that runs through downtown Calgary, where the carrier is based. Floods in that city damaged the century-old bridge that the rail cars were travelling over.

The risks of rail vs. pipelines

Transporting crude oil by rail results in almost three times the number of spills compared with pipelines, according to the Washington-based Association of American Railroads.

Rail transport also costs three times as pipeline shipments, along with higher risks, Enbridge CEO Al Monaco said during a conference in March in Houston.

Jean Cloutier, interim leader of the Green Party of Quebec, said the province needs rules to ease the danger of train disasters.

“It is also important that we act quickly to better monitor and regulate corporations” that transport hazardous cargos by rail, road, water or pipelines, Cloutier said in an e-mailed statement.

Railroads and pipelines both deliver more than 99% of products without incident.

US pipelines carried 474.6 billion gallons of crude and petroleum products in 2012 and reported 2.3 million gallons spilled, an effective rate of 0.0005%, according to the Association of Oil Pipelines.

Over the entire decade ending with 2012, railroads hauled 11.2 billion gallons of crude with 95 256 gallons spilled, the majority from just one 2008 accident in Oklahoma that accounted for 81 103 gallons, according to the rail association.

Edited from various sources by Elizabeth Corner.

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