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Crews work in the area of the derailed tanker cars in Lac-Mégantic, Que., on July 14, 2013. The train derailment and subsequent fires and explosions destroyed much of the downtown area of the picturesque Quebec town. (PETER POWER/THE GLOBE AND MAIL)
Crews work in the area of the derailed tanker cars in Lac-Mégantic, Que., on July 14, 2013. The train derailment and subsequent fires and explosions destroyed much of the downtown area of the picturesque Quebec town. (PETER POWER/THE GLOBE AND MAIL)

GLOBE INVESTIGATION

Inside the oil-shipping free-for-all that brought disaster to Lac-Mégantic Add to ...

An investigation into the disaster and its causes.

Long before disaster struck, the 5,900 residents of Lac-Mégantic had grown accustomed to the sight of large oil tankers rolling through their small, tightly knit community in the Eastern Townships of Quebec.

Globe and Mail Update Dec. 02 2013, 6:00 AM EST

Video: From the U.S. to Lac-Mégantic: Inside the massive growth of oil by rail

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A shortage of oil pipelines in North America had created a new kind of railway industry traversing the continent. In just a few years, tankers carrying crude oil from the resource-rich West had grown from a mere 8,000 in 2009 to nearly 400,000, and Lac-Mégantic is located along one of the main routes to refineries in the East.

Despite this extraordinary boom in oil shipments, there was no change in regulatory oversight, or added safety measures, governing these veritable pipelines on wheels passing through hundreds of small towns across the country.

There were no new rules affecting the chain of 72 crude-laden tankers that barrelled toward the Quebec town on the night of July 6 – the same train that would explode in the worst rail disaster in modern Canadian history. The railway was not required to formulate a plan to deal with catastrophe, in the event the crude train derailed.

Such strategies, known as Emergency Response Assistance Plans, are the primary safeguard against materials designated as dangerous that move through communities. Though these plans are required for shipping everything from chlorine to gasoline, they do not apply to crude – even though regulators had ample opportunity to make that change. For years, Ottawa never saw crude, even in mass quantities, as such a dangerous product.

There were also no rules determining how much crude could be placed on one load, or how many tankers could be strung together without creating the risk of large explosions. There were no regulations requiring railways to place buffer cars periodically through these hazardous loads to help minimize the danger of an explosion. The number of inspectors designed to oversee the industry, meanwhile, had dropped from one for every 14 tanker cars on the rails to just one for every 4,000. In this specific instance, the paperwork relating to the cargo was wrong, underestimating the volatility of the oil, and there are serious concerns about whether the contents were properly tested prior to shipment.

In the four months since the Lac-Mégantic derailment, which killed 47 people and devastated the town, The Globe and Mail has investigated how the oil-by-rail industry came to exist, and what safeguards were put in place by government and regulators to ensure that moving vast quantities of oil on trains didn’t expose the public to undue risks.

The investigation, which included gaining exclusive access to the site in North Dakota where the ill-fated Lac-Mégantic train was loaded, has uncovered serious questions about the practices employed by railways and oil companies, and what little they know about the volatility of the oil they ship by rail. Although Transport Canada officials have been reserved on the specifics of the disaster until the government completes its investigation into the Lac-Mégantic derailment, two high-ranking former hazardous materials inspectors in the U.S. agreed to take The Globe inside this new and murky world of crude by rail.

The newspaper conducted dozens of interviews with industry insiders, including railway officials, oil shippers, chemical analysts, inspectors and regulators, and obtained documents through Access to Information laws. What emerges is a disturbing picture of regulatory loopholes, government indifference and systemic failures in oversight that have, in a relatively short period of time, allowed railways to operate without close scrutiny on their way to making significant new revenue on oil shipments.

But who allowed this to happen? As more than 80,000 barrels of oil per shipment began to move on rails designed more than a century ago for shipping less volatile cargo such as lumber, coal or grain, minimal checks and balances were put in place. When the decision was made to begin shipping such huge amounts of oil by rail, the industry required no approval from government or regulators to proceed, even though documents obtained by The Globe show that U.S. government officials knew that moving such a “high concentration of hazardous materials” was inherently more risky.

“This was the worst accident in my 40 years of rail experience with hazardous materials, killing that many people,” Ed Pritchard a former senior hazardous materials inspector for the Federal Railroad Administration in Washington, said of the Lac-Mégantic derailment. “I don’t recall oil shipments ever being a problem. Now all of a sudden they’re running 100-car trains of oil.”

And this oil, it turns out, was a particularly volatile form of crude.

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