Canada speeds up timeline for stronger rail cars for crude

(Reuters) - Canada’s transport minister said on Wednesday his department would require stronger tank cars for transporting crude oil and other dangerous goods far sooner than previous deadlines, bolstering safety rules as crude by rail exports have hit record levels.

FILE PHOTO: Rail cars including crude tankers are seen at the Canadian Nationals (CN) Thornton Railroad Yards in Surrey, British Columbia, Canada, June 21, 2012. REUTERS/Andy Clark/File Photo

Transport Canada will now require all unjacketed CPC 1232 tank cars that carry crude oil be phased out by Nov. 1 this year, 17 months earlier than a prior deadline.

Unjacketed CPC 1232 and older DOT 111 cars that carry condensate - a volatile light hydrocarbon - will be phased out by January 1, 2019, well ahead of a previous 2025 deadline.

Phasing out the “least crash-resistant tank cars as soon as possible” will enhance the safety of communities along rail lines and help ensure the reliable transport of goods and commodities, Canada’s Minister of Transport Marc Garneau said in a statement.

The move comes one month after the head of Canada’s Transportation Safety Board told Reuters that stronger rail cars for moving flammable liquids ought to be required sooner than the initial deadlines.

Canada and the United States both introduced new safety standards for crude by rail, including the phase out of certain cars, after a runaway train carrying oil exploded in the Quebec town of Lac Megantic in 2013, killing 47 people.

DOT 111 cars, involved in that accident, were phased out for crude usage in Canada in November 2016.

The latest phase outs come as Canada’s exports of crude by rail have hit historic levels, surpassing 200,000 barrels per day (bpd) in June and expected to rise sharply through 2019.

The increase comes as oil output from Western Canada has outstripped pipeline capacity, prompting producers to sign transport deals with Canada’s two largest railways.

An industry group representing Canada’s oil producers said the government had consulted with industry on the changes and the new timelines would have a “limited impact” on Canada’s rising crude by rail exports.

“I think the transition of this fleet to safer cars, and making sure this product is transported in the safest cars possible, is everybody’s shared goal,” said Brad Herald of the Canadian Association of Petroleum Producers.

(This story has been refiled to change to minister from ministry in first paragraph)

Reporting by Julie Gordon in Vancouver and Shanti S Nair in Bengaluru; Editing by Shounak Dasgupta and Bill Berkrot