Railways and shippers have been ordered to test and classify crude oil by its volatility under a new set of federal transportation regulations.
The changes, which are a response to the deadly explosion at Lac-Mégantic, Que., are an attempt to address heightened safety risks associated with a surge in companies shipping light crude oil by rail.
The new rules announced Thursday follow several Globe and Mail reports that have highlighted how oil shipped to Canada from the Bakken region of North Dakota is more volatile than previously believed. Questions over labelling and volatility are at the heart of a probe into the disaster, which killed 47 people and destroyed the core of the small Quebec town.
Since the derailment, The Globe and Mail has reported that energy-sector players have raised concerns about the safety of shipping oil from the Bakken region, such as the cargo that exploded in Lac-Mégantic, given its susceptibility to combustion. The Globe has also obtained documents that show U.S. regulators were worried about the chemical makeup and flashpoint of the oil before the train carrying more than 70 tanker cars crashed in the Quebec town.
The changes announced by the Department of Transportation in Ottawa will require “any person who imports or transports crude oil to conduct classification tests on crude oil.”
In particular, importers must conduct tests on shipments carrying the classification number 1267, the standard train placard for oil, and 1993, the standard placard for flammable liquids. The requirement applies to any oil that has not been tested since July 7, which is the day after the Lac-Mégantic derailment occurred.
Transportation Minister Lisa Raitt said in a statement that the direction to the industry was “a targeted action to increase the safety of the transportation of dangerous goods.” However, it is not clear how stricter labels could have prevented the Lac-Mégantic disaster.
The new regulations raise several questions, including how Ottawa determines who is the importer. The announcement makes no mention of whether the oil broker, which owns the cargo, must test the oil, or whether the onus applies to the railway carrying it across the border, or the refinery on the receiving end of the shipment. A spokesperson for Ms. Raitt’s office could not immediately be reached Thursday.
An even bigger question hanging over the changes is whether they will have any impact on the way oil is shipped and handled as it passes through Canadian towns.
As The Globe has reported, federal regulations of the rail industry do not require shippers and railways to handle the oil any differently if it is classified as more volatile than typical crude oil. Shipments of crude under the placard 1267 are denoted with a sub-classification, or packing group, that is numbered 1 to 3, depending on the flashpoint of the product being shipped.
However, as industry observers and railway officials have told The Globe in interviews, the new classifications wouldn’t force companies to handle the oil passing through cities and towns with any special precautions.