•  
  •  

Oil by Rail Transport

Oil by Rail Transport

On February 20, Bill C-52, the Safe and Accountable Rail Act was introduced into Parliament. The proposed oil by rail transport legislation offers amendments to both The Canada Transportation Act and the Rail Safety Act. In summary, Bill C-52 sets out new minimum insurance requirements, introduces new levies for crude oil shippers, and provides for enhanced oversight and information sharing.

Bill C-52 in the amendments to the Rail Safety Act will permit rail safety inspectors to take a more proactive approach to rail safety, with increased powers. For example, Section 25 amends section 31 of the Rail Safety Act states:

31(1) If the rail safety inspector is of the opinion that a person’s conduct or anything for which a person is responsible constitutes a threat to the safety or security of railway operations, the inspector shall inform by notice, sent to the person and to any company whose rail operations are affected by the threat, the person and the company of that opinion and of the reason for it.

(2) If the rail safety inspector is satisfied that the threat is immediate, the inspector may, in the notice to the person or any company whose rail operation are affected by the threat, take measures that are specified in the notice to mitigate the threat until it has been removed to the inspector’s satisfaction.

These provisions give more regulatory authority to Transport Canada rail safety inspectors than previously existed, and can be applied in the prevention and protection phase of risk management to avert incidents, for example limiting rail speed. Similar type provisions are long-standing in the Canada Shipping Act 2001 and its predecessor that allowed a Marine safety inspector appointed under the authority of Parliament to detain any ship it felt was unsafe and can be traced back to the 19th century and the UK’s Merchant Shipping Acts.

The 2007 Transport Canada policy document Moving Forward -Changing the Safety and Security Culture – A Strategic Direction for Safety and Security Management provides the underlying governance philosophy that is being further refined with Bill C-52. The risk management approach is based on a system of prevention, protection, and response. The goal is to prevent accidents from happening by concentrating on the prevention side to addresses various factors such as rail bed maintenance, training, fatigue, and train speed. This risk approach seeks to minimize low probability, high consequence events that can give disastrous impacts on communities as we have seen in Lac Megnatic, and in the three recent derailments in Northern Ontario.

Contemporary safety management best practices seek to integrate corporate regulatory risk management and stakeholder perspectives and concerns in establishing performance objectives and progress indicators. Currently, a more flexible risk management approach is used that focuses on outcomes rather than the more rigid style of rules and process-driven regulations that characterized earlier periods of transport safety management. It was thought that this less prescriptive approach would encourage rapid adoption of new technologies, and that best practices would be brought to bear to minimize transportation risk. Standards could be developed working in conjunction with the private sector and the regulator.

With oil by rail transport increasing regulators have been late to realize that in communities the only thing that matters is the safe passage of trains rolling through communities. Given the importance of Canada’s multi-modal transport system, we need to look at the regulation of all transportation sectors and, in particular, the railways, which is the subject matter of this article, across federal, provincial and municipal boundaries and jurisdictions.

We began to realize that environmental, safety and economic regulations are interconnected, and must be examined under the lens of safety management, which is simply a form of both governance and corporate risk management. The key is to create a nimble regulatory regime that encourages economic activity but at the same time minimizes risk.

Lac Megnatic was a wake-up call for action to ensure our transportation system is both nimble and safe and not dismissive of the local voices that seek to draw attention to these issues. Implementation will be especially challenging in a declining price environment for oil, coupled with the lack of access to pipeline capacity. The Canada Transportation Act review is an integral part of examining the transport of dangerous goods. Rail safety is an integral part of our transportation strategy. It is not an add-on.

Read the April 27, 2015, issue of Canadian Sailings for a series of articles on oil-by-rail, are oil train derailments a new fact of life, and tank cars, not the only problem: volatile oil under scrutiny.