Crude Oil Train Derails in Canada’s New Brunswick; Fire Still Burning

A Canadian National Railway Co. train carrying crude oil and propane derailed in the eastern province of New Brunswick and sparked a blaze that was still burning more than 12 hours after the accident.

A helicopter is being brought in today to pinpoint what is ablaze in the wreckage of the 122-car train that jumped the tracks about 7 p.m. local time yesterday near the town of Plaster Rock, said Jim Feeny, a railroad spokesman. There are 14 cars and a locomotive in the fire zone, Feeny said.

“This morning, very soon, we will have aerial surveillance,” Feeny said by telephone. “We will be able to get ground forces in, safely, closer to the cars, and determine exactly what is on fire. That will determine what we and local authorities need to do to develop the response plan.”

Yesterday’s accident and a Dec. 30 crude-train derailment in North Dakota added to the attention on the risks of moving oil by rail. As the U.S. government weighs whether to approve TransCanada Corp.’s proposed Keystone XL pipeline, trains are hauling more petroleum products amid a boom in shale-oil production.

The safety debate was punctuated by the runaway crude train that exploded and killed 47 people in July in Lac Megantic, Quebec, Canada’s deadliest rail disaster in more than a century.

The fire in the Plaster Rock derailment was under control by about 10 a.m. today, Canadian Broadcasting Corp. reported, citing an unidentified railroad spokesman.

No crew members or residents were injured, Feeny said. About 50 to 60 people were evacuated in a two-kilometer (1.2 mile) radius of the accident, the New Brunswick government said, and Canada’s Transportation Safety Board dispatched a team to the site.

Canadian National fell 1.1 percent to C$58.92 at 10:38 a.m. in Toronto. The stock slid to C$58.90 earlier, the lowest in intraday trading since Dec. 18, according to data compiled by Bloomberg.

Rail accidents involving dangerous goods are on the rise in Canada, with 132 such cases in the first 11 months of 2013, a 19 percent jump from a year earlier, according to the safety board. The previous five-year average was 124.

That increase came amid a decline in Canadian rail accidents of all types. Through November, the tally of 883 marked a 5.7 percent drop from a year earlier, and the previous five-year average was 987.

Canadian energy producers are backing proposals to move as much as 1.1 million barrels a day by rail in the next three to five years, according to the Canadian Energy Research Institute. That’s up from 224,000 barrels a day last year, according to a Peters & Co. report from August.

Canadian National’s train originated in Toronto and was heading for Moncton, New Brunswick, Feeny said. The cars were bound for “a variety of customers” in eastern Canada, he said, declining to be more specific. Canadian National has an alternate line available until the eastern part of its mainline has been cleared, he said.

Crude by rail is a fast-growing, if small, business for most North American carriers.

Canadian National’s revenue from crude oil shipments in 2013 probably amounted to about C$400 million, or 3 percent to 4 percent of sales, Chief Executive Officer Claude Mongeau said at an investor meeting in Toronto last month. The railroad may double its crude business in the next two years, Mongeau said.

“You can count on that, if we continue to move it safely,” Mongeau said Dec. 11.

Canadian National carried about 70,000 carloads of crude oil last year, more than doubling 2012’s tally and a 14-fold increase over 2011, a slide presentation posted on the railroad’s website. Four years ago, it didn’t ship any crude.

–With assistance from Brian Swint in London, Andrew Mayeda in Ottawa and Jeremy van Loon in Calgary. Editors: Ed Dufner, Cecile Daurat