Statements & Speeches

Hydrocarbon Transportation

March 26, 2014

Rail Safety in Canada: Senate ENEV Committee Report in wake of the disaster in Lac-Mégantic.

Honourable senators, on March 4, Senator Neufeld  called the attention of the Senate to the twelfth report of the Standing Senate  Committee on Energy, the Environment and Natural Resources. He offered his  insight into the goals and purpose of our report, and I am pleased to do the  same. The report, Moving Energy Safely: A Study of the Safe Transport of  Hydrocarbons by Pipeline, Tankers and Railcars in Canada, is an outstanding  example of the kind of work we do as senators.

In July 2012, the committee completed a three-year study on the current state  and future of Canada’s energy sector. During this study, it became evident that  there were gaps in information regarding the transportation of bulk hydrocarbons  in Canada.

Members of the committee agreed this issue was of great importance to  Canadians and that it required further investigation. On November 28, 2012, the  committee sought authorization to study three modes of transportation of bulk  hydrocarbons in Canada: transmission pipelines, tankers and railcars. The report  states:

The goal was to examine the current state of emergency and spill prevention, preparedness and response frameworks under federal authority and to make recommendations to improve public safety and the protection of the environment.

This goal was set amidst growing concerns over rapidly expanding oil and gas  production. From the outset, it was clear that the committee was engaged in an  area of study that was not only timely, but critical for future planning and  regulation.

The committee travelled on several fact-finding missions across the country,  including visits to Calgary, Hamilton, Saint John, Halifax, Vancouver, Seattle  and Valdez, Alaska. Over the course of 18 meetings we heard from 51 expert  witnesses including provincial and federal regulators, industry representatives,  engineers and scientists, spill response organizations, First Nations, and  environmental groups.

The testimony was wide-ranging and informative: Witnesses from industry  discussed their safety records; marine spill response service teams outlined  their capacity to contain and clean up a spill; and environmental groups  expressed concern about the behaviour of spilled bitumen in the natural  environment.

When the study began, pipelines were at the forefront of discussions in the  media and elsewhere. However, the committee’s decision to address three  different modes of transportation of oil and gas, particularly rail, proved to  be a wise choice. Throughout the course of the study, the committee learned that  although the transportation of crude, petroleum products and other dangerous  goods by rail is not new in Canada, it has exploded in recent years. According  to the rail industry, 160,000 carloads of crude were shipped in 2013, up  substantially from 500 in 2009.

Then, on July 6, just 16 days after the committee heard from its last  witness, a runaway train carrying 72 tankers of crude oil crashed into the  downtown of Lac-Mégantic, killing 47 people. This event has marked a turning  point in public awareness of rail transport.

Suddenly, the same questions the committee had put to witnesses began to  circulate in national media: Who is liable if a spill occurs? What are the  regulations surrounding safety improvements for DOT-111 tank cars? Have industry  and regulators responded to the recommendations made by the Commissioner of the  Environment and Sustainable Development in December 2011? The section on rail in Moving Energy Safely addresses these important questions and makes concrete  recommendations on how to move forward. The committee recommends:

That Transport Canada apply appropriate minimum liability coverage thresholds to ensure rail companies have the financial capacity to cover damages caused by a major incident.


That Transport Canada review, in cooperation with the United States Department of Transportation, the use of CTC-111A and DOT-111 tank cars and consider accelerating the transition to the revised standard.


That Transport Canada implement all the recommendations from the December 2011 Report of the Commissioner of the Environment and Sustainable Development related to the transport of dangerous goods by rail.

It should also be stressed that the strength of this report goes beyond the  list of recommendations. As the chapter on rail demonstrates, the committee took  a wide-angle view of the industry and its position as a unique transportation  network. Unlike other industries, rail “can move products virtually anywhere”  and “their capacity to respond quickly with flexible cargo options” provides  stability in a shifting market.

Railways reach into remote communities. They provide a complement to  pipelines through delivery to niche markets. Let us not forget that this country  was united by the railway; it is essential to our history and to our future. And  yet there is no question that the tragedy in Lac-Mégantic has changed the way  Canadians think about the transportation of dangerous goods by rail. Among other  things, it has forced us to re-evaluate how the industry itself monitors safety  and actively promotes it. The committee heard much on the subject from rail  industry witnesses who spoke readily of the “culture of safety” deeply  embedded in all aspects of their corporate culture.

In addition, the committee heard from safety experts about the Swiss Cheese  Model of Accident Causation, where defences against accidents are represented by  slices of Swiss cheese. Holes in a company’s defences can vary in size and  position, and represent the degree of weakness or breach within each defence. An  accident is usually caused by a series of failures at weak points in a company’s  defences. When these weak points momentarily align in the presence of a threat  or danger, an accident occurs.

How then is such risk of failure and the potential accident minimized?

Safety experts testified that each company must be preoccupied with  identifying and assessing every small failure in its operations. The committee  was told by the National Energy Board that leaders have a particular  responsibility to promote safety culture within their organizations. This  includes the ability to empower front-line employees to question procedures and  investigate safety concerns at any point. Safety experts affirmed that this type  of leadership produces an environment of continuous learning and understanding  in which holes in safety defences can be identified before an accident occurs.

No doubt Canadians remain preoccupied by the catastrophic series of failures  that occurred on July 6, and require assurance from all parties — industry,  regulator and government — that all precautions are in place to minimize the  risk of recurrence. We know that it can take years to gain “social licence”  and, yet, it can take just moments for all that goodwill to be lost.

Honourable senators, the disaster in Lac-Mégantic was of unprecedented  proportion. In our report, the committee speculates that this event will incite  significant reform in the rail industry, equivalent to the impact that the 1989 Exxon Valdez spill had on marine transport.

There is no question that progress has been made. To date, we have seen a  number of improvements including tougher standards for DOT-111 tank cars; a push  for new emergency response assistance plans for crude oil; and better lines of communication between  municipalities and rail companies.

There is more work to be done, but I am confident that we have the  information we need to develop strong regulations to guide industry in their  efforts to protect Canadians and the environment. I am confident that we will  see the positive effects of these changes in the near future, and I am  confident, honourable senators, that this report has made a significant  contribution to the future of rail safety in Canada.

Thank you.