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Amid Lac-Mégantic fallout, Irving Oil pledges rail-safety upgrade

Crews work in the area of the derailed tanker cars in Lac-Mégantic, Que., on July 14, 2013.

PETER POWER/THE GLOBE AND MAIL

Irving Oil has become the first Canadian refiner to phase out the older crude-oil rail cars that have been involved in several fiery derailments, including last summer's deadly accident in Lac-Mégantic, Que.

The company said Monday it will complete the upgrade of its fleet of rail cars to new, tougher standards by April 30 and will require that all of its suppliers do the same by the end of the year.

Safety experts and regulators have long acknowledged that the ubiquitous tank cars, known as DOT-111s, are prone to rupture and spills during accidents. But the cars remain the workhorse of the industry, making up roughly 85 per cent of the 92,000 fuel tankers in use across North America.

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Irving's move means all rail cars shipping crude in and out of the company's facilities would have thicker steel shells and other safety upgrades recommended by the Association of American Railroads for newer cars.

Irving operates Canada's largest oil refinery in Saint John – the intended destination of the cars involved in the Lac-Mégantic explosion, which killed 47 people. The cars involved in the crash did not belong to Irving.

The company said the move follows recommendations issued last month by the Transportation Safety Board of Canada, calling for tougher rail car standards. But the regulator has so far not set a clear time frame for outlawing older DOT-111s, while acknowledging their flaws, including insufficient linings, external shields and venting to protect against punctures or gas buildups.

"We have made substantial progress in converting our fleet of crude-oil rail cars to meet this enhanced standard," Irving Oil president and chief executive Paul Browning said in a statement. "Safety is paramount to our business, and by taking this voluntary leadership position with our own fleet of rail cars we expect to set a standard for the suppliers and marketers who ship crude oil to our facilities to quickly follow our example."

Irving is believed to be the first Canadian refiner to end the use of the older cars. Earlier this month, Teroso became the first U.S. refiner to commit to shifting its entire fleet to newer and sturdier tankers by mid-2014.

Environmentalists, however, said the announcement by Irving Oil does little to mitigate their concerns about the possibility of other horrific accidents.

"It's an interesting move by Irving, but we've got to set the basic rules," said Keith Stewart, an energy expert for Greenpeace Canada. Calling for Transport Minister Lisa Raitt to pass new safety laws, Mr. Stewart added that "safety experts on both sides of the border said the new DOT-111s aren't safe enough."

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Last month, federal safety regulators on both sides of the border issued an unprecedented joint warning about transporting crude oil by rail.

Wendy Tadros, the chair of the Transportation Safety Board, said at that time that "a long and gradual phase-out of older model cars simply isn't good enough – it leaves too much risk in the system." The Transportation Ministry says it is reviewing reports by regulators on an "urgent" basis.

Irving said 88 per cent of its own rail cars are already built to the higher standard already in place for cars built after 2011. Spokeswoman Samantha Robinson would not say how many cars the company intends to scrap nor what the conversion will cost.

But she said the company doesn't anticipate any disruption in oil deliveries as a result of the changeover.

Canadian National Railways recently started charging shippers more to transport crude in older DOT-111 tank cars. CN, which has acknowledged that older cars are more prone to failure, said it is actively setting its rates to encourage a move to more robust tank cars.

The large majority of the roughly 92,000 tank cars used in North America to ship crude and other flammable liquids are not built to the tougher industry safety standards. Since 2011, new cars have been built to a higher standard, but these represent only about 15 per cent of the total fleet. Most of the cars belong to shippers and refiners, rather than railroads.

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In an e-mailed statement, Ms. Raitt said she welcomed the Irving announcement and pledged to work with her U.S. counterpart "on additional standards to strengthen the safety of tank cars."

Follow us on Twitter: @barriemckenna and @colinfreeze

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National Business Correspondent

Barrie McKenna is correspondent and columnist in The Globe and Mail's Ottawa bureau. From 1997 until 2010, he covered Washington from The Globe's bureau in the U.S. capital. During his U.S. posting, he traveled widely, filing stories from more than 30 states. Mr. McKenna has also been a frequent visitor to Japan and South Korea on reporting assignments. More

National security reporter

Focusing on Canadian matters during the past decade, Colin Freeze has reported extensively on the interplay between government, police, spy services, and the judiciary. Colin has twice been to Afghanistan to be embedded with the Canadian military. More

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