(Adds CN Rail statement)
By David Ljunggren and Rod Nickel
OTTAWA/WINNIPEG, Manitoba, Feb 6 (Reuters) - Canada said on Thursday it would impose temporary speed limits on trains hauling dangerous goods after a Canadian Pacific Railway Ltd crude oil train derailed and caught fire.
The accident, which happened in the early hours of Thursday near Guernsey, Saskatchewan, was the second derailment in the area in a span of two months.
Federal Transport Minister Marc Garneau said that effective at midnight on Friday (0500 GMT Saturday), trains hauling more than 20 cars of dangerous goods would be limited to 25 miles per hour (40 kph) across the country for the next 30 days.
The limit in urban areas will be 20 mph (32 kph), he told reporters. The reductions represent a halving from the normal speed limits. Depending on results of the probe into Thursday’s derailment, the 30-day period could be shortened or lengthened.
“I realize there will be an effect on the economy of the country ... but it is very, very important that we do not sacrifice safety,” Garneau said.
Canadian Pacific Chief Executive Keith Creel said he fully backed the move and had already implemented the slowdown.
“Until we better understand the facts relating to today’s incident, it is prudent to operate with an abundance of caution,” he said in a statement. The company said there had been no injuries.
Canada’s biggest railway, Canadian National Railway Co , will comply with the order and is reviewing its “significant impact on our operations,” spokesman Jonathan Abecassis said.
Dangerous goods include crude oil that is diluted with condensate, gasoline, diesel, chemicals and some fertilizers, said John Zahary, chief executive of Altex Energy. The company operates terminals that load undiluted crude, which is not classified as a dangerous good.
The order will have a knock-on effect through the transportation system as rail workers and locomotives are tied up on longer trips, he said by phone.
“There is a finite number of people, of engineers driving the trains, a finite number of locomotives. So there is a direct impact on the dangerous goods, and maybe an indirect impact on everything else,” he said.
“All that stuff is going to slow down.”
In July 2013, 47 Canadians died in the Quebec town of Lac-Megantic after a train with oil tankers derailed and exploded. (Reporting by David Ljunggren in Ottawa and Rod Nickel in Winnipeg; Additional reporting by Ankit Ajmera in Bengaluru; Editing by Alistair Bell and Peter Cooney)