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Oil companies pay into compensation fund for Quebec train crash – deny further liability

Repost from The Hill

Oil companies pay into compensation fund for Quebec train crash

By Timothy Cama – 06/11/15 08:35 AM EDT
This July 16, 2013, file photo shows firefighters and workers at the crash site of a train derailment that killed 47 people in Lac-Megantic, Quebec. A watchdog from the Justice Department is looking for transparency on dollar amounts that oil companies are paying into a fund for victims of the crash. —Ryan Remiorz/Associated Press

Oil companies have contributed tens of millions of dollars toward a fund to compensate victims of a major 2013 oil train disaster in Quebec, Canada, that killed 47.

Companies like Royal Dutch Shell PLC, Marathon Oil Corp., ConocoPhillips Co. and Irving Oil Ltd. have paid into the $345 million fund, though they deny responsibility for the events on the train transporting their products, The Wall Street Journal reports.

If courts in the United States and Canada approve the oil companies’ role in the fund, the companies will be shielded from liability for any negligence they had involving the disaster in Lac-Megantic, including for failing to test the oil’s vulnerability.

The Montreal, Maine & Atlantic Railway Ltd., which ran the train that derailed and exploded, filed for bankruptcy shortly after the incident.

But its court-appointed trustee said the oil companies knew that the oil was volatile and dangerous.

The oil companies have responded that their responsibility ended when they extracted the oil.

Most of the companies that contributed to the fund declined to comment to The Wall Street Journal. Marathon Oil told the newspaper that its contribution is not an acknowledgment of liability.

The Quebec disaster led officials in both Canada and the United States to pay new attention to the use of oil trains, which has increased dramatically in recent years along with oil production in places like the Bakken shale region.

It has resulted in rules in both countries that will ban the use of the oldest tank cars for oil in the coming years, as well as speed restrictions and other operational regulations.

Some Democratic lawmakers, led by Sen. Maria Cantwell (D-Wash.), have pushed for regulations limiting oil volatility in rail transport.

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