December 11, 2014 / 8:49 PM / in 3 years

Exclusive: U.S., Canada transport chiefs to meet on oil train safety

WASHINGTON/OTTAWA (Reuters) - Top transportation officials from Canada and the United States are due to meet next week to hash out differences about safety regulations for trains that carry oil, sources familiar with the planned meeting said on Thursday.

Both governments are drafting safety rules for trains that move fuel from North Dakota’s Bakken energy patch to refineries.

North Dakota crude was the cargo involved in several fiery mishaps in the last 18 months, and a derailment disaster that left 47 dead in Lac-Megantic, Quebec, in July 2013.

That crash involved old-style DOT-111 tanker cars that Canada wants taken off the tracks by May 2017. U.S. companies may have trouble complying with that date, and a U.S. plan envisions many of those cars hauling fuel through late 2020.

Canadian Transport Minister Lisa Raitt is due to host U.S. Transportation Secretary Anthony Foxx in Toronto on Dec. 18 to talk about rail tanker safety, according to two sources familiar with the plan.

A spokeswoman for Raitt said the meeting was not yet 100 percent guaranteed to happen.

”I can only say that, assuming they meet, rail safety will

be one of a few topics discussed,” she said, but declined to give more details.

A U.S. Transportation Department official acknowledged that the Canada meeting was being planned and that oil train regulations would be on the agenda.

OBSOLETE TANK CARS

The oil and rail industries have expressed broad support for improved safety rules, but have warned that different standards in the two nations could stifle commerce.

One question is what to do with roughly 57,000 DOT-111 tank cars that have been the workhorse of the oil train business. Safety advocates and officials say they are no longer fit for the job.

The Canadian and U.S. governments hope to reach agreement on when those tankers will be deemed obsolete for shipping Bakken fuel in both countries. Also, both countries expect to endorse a next-generation tank car design to carry crude on the tracks.

U.S. officials have said they expect to offer a final oil train safety plan by March though they might seek more time to digest roughly 4,000 public comments they have received.

North Dakota crude output exceeds 1.2 million barrels per day and about 70 percent of that moves on by oil train. That reliance may put the Canadian target of May 2017 out of reach, industry officials have said.

“There is a real question over whether that is a workable deadline just given the capacity that is out there,” said one source.

Another uncertainty is the fate of roughly 23,000 outdated tank cars that U.S. officials say will naturally migrate from carry light crude to heavy oil sands fuel from Western Canada.

Oil industry officials who work the oil sands fields of Western Canada say those tank cars are not wanted in their patch.

One other wrinkle to the oil train safety timeline: one version of a U.S. budget plan would require the Transportation Department to finish its rule by the middle of next month.

Canada outlined its own oil train safety plan in July. Officials say they expect a formal Canadian outline of its oil train safety plan by year-end.

Reporting By Patrick Rucker in Washington and David Ljunggren in Ottawa; Editing by David Gregorio

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