Exclusive - Canada insists on oil train tanker phase-out ahead of U.S

Wed Jan 14, 2015 4:37pm EST
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By Patrick Rucker and David Ljunggren

WASHINGTON/OTTAWA (Reuters) - Canada is committed to taking outmoded tank cars off the rails years earlier than U.S. officials envision, sources familiar with negotiations say, leaving the trading partners at an impasse as they try to harmonize oil train safety measures.

In the wake of the 2013 Lac-Megantic disaster, in which 47 people died after an oil train derailed and blew up in Canada, both nations agreed to retire older versions of the tank car model involved in that tragedy, the DOT-111.

The roughly 60,000 such cars now in service constitute more than half the North American tank car fleet, and the model has been a workhorse in North Dakota's Bakken energy patch.

The United States wants to stop large-scale shipments of the most volatile crude in older DOT-111 cars by October 2017 and to halt all such fuel deliveries in that model by October 2020.

Canada wants fuel deliveries in the older wagons to end by May 2017.

The oil industry has said the Canadian timetable is unrealistic.

In a sign of concern, U.S. Transport Secretary Anthony Foxx flew to Toronto last month for talks with Canadian Transport Minister Lisa Raitt in which the two discussed whether Canada's pace for retiring DOT-111 tankers was realistic.

Sources familiar with the two-hour meeting said Raitt insisted Canada would not relax the timetable.   Continued...

A freight car for crude oil sits outside the town of Farnham, Quebec, July 10, 2013. REUTERS/Christinne Muschi