Tag Archives: Irving Oil

Rail company ends shipping of crude oil in Maine & New Hampshire

Repost from The Portland Press Herald
[Editor:  Interesting summary of various effects on rail companies following the Lac-Mégantic disaster.  - RS]

Irving ends rail shipping of crude oil through Maine

The cutback is due to a drop in global demand and is not related to the Lac-Megantic rail disaster, the firm says.
By Tom Bell, July 15, 2015

Irving Oil has stopped shipping crude oil on railroads through Maine and has no plans to revive the practice.

The Canadian company, which operates an oil refinery in Saint John, New Brunswick, confirmed the policy change in a June 30 email to the Maine Center for Public Interest Reporting.

The change means there will be no more oil shipments though New Hampshire and southern and central Maine on Pan Am Railways. In addition, there will be no more oil shipments on the Eastern Maine Railway, which connects with Pan Am at Mattawamkeag and continues through Washington County to the Canadian border.

The cutback is because of global oil-supply-and-demand issues and is not related to the fallout from the Lac-Megantic rail disaster, Mark Sherman, Irving’s chief operating officer, told the Maine Center for Public Interest Reporting. The U.S. demand for Canadian-produced petroleum products has declined in the wake of an oversupply of oil from domestic and Mideast sources.

In 2012, Maine railroads shipped 5.2 million barrels of crude oil, but shipments declined sharply after the July 6, 2013 accident in Lac-Megantic, Quebec, when an unattended 74-car freight train carrying Bakken crude oil rolled and derailed, resulting in a fire and explosion that killed 47 people.

The railroad involved in the disaster, the Montreal, Maine & Atlantic Railway, never carried oil again and went bankrupt. Its successor, the Central Maine & Quebec Railway, also has never carried oil because of political opposition in Lac-Megantic.

Pan Am, whose trains travel through Portland, carried just 15,545 barrels of oil in all of 2014, according to records the company filed with the Maine Department of Environmental Protection. In 2015, Pan Am has carried 37,128 barrels. All those shipments occurred in February, the last month the railroad delivered oil to the Irving refinery, according to the Maine Center for Public Interest Reporting.

An official with Pan Am could not immediately be reached for comment.

John Giles, CEO of Central Maine & Quebec Railway, had been seeking an agreement with Lac-Megantic officials to restart oil train shipments through the Canadian town. On Tuesday, Giles said the railroad does not need to carry oil to be profitable.

“I was never counting on moving crude oil in the first place,” Giles said.

Giles said his railroad spent $10 million to upgrade the rail line last year and is spending $6 million this year, with about half of that investment in Maine.

An investigation after the Lac-Megantic accident found that the tank-car labels understated the flammability of the oil. Twenty-five companies have offered a total of $431 million (Canadian) to settle lawsuits arising out of the disaster. Irving Oil’s contribution is $75 million. The settlement is being considered by U.S. and Canadian courts.

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Quebec town: Train disaster settlement provides very little

Repost from AP News, The Big Story
[Editor: Significant quote: “Lac-Megantic Mayor Colette Roy Laroche said over the weekend the estimated cost of rebuilding the town is about $2 billion.”  See also: repost from The Globe and Mail.  – RS]

Quebec town: Train disaster settlement provides very little

Jan. 12, 2015

MONTREAL (AP) — The deputy mayor of a Quebec town where a fiery oil train derailment killed 47 people said Monday a proposed settlement fund for victims represents just a fraction of what’s needed.

A $200-million settlement was announced last week, with more than one-half of the money going to various levels of government. About $50 million is destined for relatives of the 47 people who died in the July 2013 disaster, although the amount could rise. The settlement involves the Montreal Maine and Atlantic Canada Co., its insurance carrier, rail-car manufacturers and some oil producers. Three major companies have declined to participate — World Fuel Services, Canadian Pacific Railway and Irving Oil.

Lac Megantic Deputy Mayor Richard Michaud said the families of the victims will share in the settlement money, which is “very little considering there are more than 20 orphans who must rebuild their lives.”

“Two hundred million can seem like a lot of money but in my opinion, it’s very little,” Michaud said. “Much more than $200 million has been injected by the federal and provincial government to decontaminate the devastated territory alone, and we’re not even talking about reconstruction.”

Much of downtown Lac Megantic was destroyed on July 6, 2013, by a raging fire caused when an unattended train with 72 oil tankers carrying volatile crude derailed after it began rolling downhill toward the town of 10,000 people. More than 60 tankers derailed and several exploded. Forty-seven people died, and dozens of buildings were destroyed.

U.S. bankruptcy trustee Robert Keach is hoping the $200 million amount rises considerably before final approval of the plan in U.S. and Canadian courts.

Keach, a court-appointed trustee in the defunct railroad’s bankruptcy case in Maine, said the draft sets aside about $50 million of the $200 million pool for wrongful death claims, which could increase through a reallocation of the federal government’s share to as much as $57 million.

Up to $29 million could go to property damage, while another $19 million could go to bodily injury and moral damage claims, Keach said.

Those amounts reflect a possible reallocation of the federal government’s take. As it currently stands, more than 52 percent of the overall funds would go to provincial, federal and municipal governments. The formulas could change if the amount goes up.

“This is only a draft, so there are separate but parallel processes on both sides of the border,” Keach said. “The hope is we’ll have all the approval orders in place in early to mid-April so we could have a distribution in place by June or July.

“We are hoping (the final amount) grows between now and then, but the deadline for it growing is going to be those final hearings,” he added.

Yannick Gagne, owner of the Musi-Cafe, a business that was destroyed and where the majority of the victims died, said money won’t bring back the lives lost but could help with the relaunch of the downtown. Plenty more money will be required, however, to rebuild the town center essentially from scratch, he said.

Reconstruction costs are significant and Gagne himself has taken out loans, used insurance money and paid out of pocket. He also spent seven months out of work.

“For many people, it was a difficult time financially,” said Gagne, whose cafe quietly reopened on Dec. 15. “The mayor said it best —that $200 million is not sufficient.

“We are a long way from what we need. And it’s not up to the population to pay for this tragedy.”

Lac-Megantic Mayor Colette Roy Laroche said over the weekend the estimated cost of rebuilding the town is about $2 billion.

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$200 million settlement money announced for victims of Lac-Mégantic rail disaster

Repost from The Globe and Mail, Toronto
[Editor: Significant quote: "'The main three bad actors, World Fuels, Canadian Pacific Railway and Irving Oil, aren’t contributing a penny to this settlement. We’re going to keep going after them very hard in American court,' said Mr. Flowers."  - RS]

Settlement money announced for victims of Lac-Mégantic rail disaster

Justin Giovannetti, Jan. 09 2015
Smoke rises from tanker cars in downtown Lac-Megantic, Que., on July 6, 2013. THE CANADIAN PRESS/Paul Chiasson

Smoke rises from tanker cars in downtown Lac-Megantic, Que., on July 6, 2013. THE CANADIAN PRESS/Paul Chiasson

The families of those who died in the Lac-Mégantic rail disaster will have access to a $200-million (U.S.) fund, according to details released Friday from the bankruptcy case of the railroad responsible for the 2013 tragedy in eastern Quebec.

The fund still needs to be approved by Canadian and American courts before the first cheques are mailed to the families of the 47 people killed in the crash. A firefighter who died by suicide three months after the disaster was added to the list of victims. Money could flow as soon as this spring.

“The families of the victims need to live with this disaster every day. Those in town have gone into debt to try to get back on our feet and rebuild. If this could let us start over our lives on the right foot, that would be great, but we haven’t seen any money yet,” Yannick Gagné, the owner of the Musi-Café bar where the majority of the victims died, told The Globe on Friday.

Mr. Gagné has rebuilt the Musi-Café, but he’s still awaiting the help he says he was promised in the weeks after the disaster.

Just after 1 a.m. on July 6, 2013, a train carrying 72 cars of crude oil from North Dakota to a refinery in New Brunswick careened while unmanned into the centre of town and derailed. A series of powerful explosions then levelled much of the city’s once picturesque downtown.

The settlement money announced Friday was drawn not only from the liquidation of the Montreal, Maine & Atlantic Railway, the firm at the centre of the derailment, but also from a number of companies that extracted the oil, built the rail cars and leased them to shippers.

According to Peter Flowers, a Chicago-based lawyer involved in a wrongful death lawsuit, talks are continuing about how much of the $200-million will go to the families of victims.

“The money goes to the wrongful death victims – a class-action filed in Canada – those who suffered economic and emotional damages, and to the provincial and federal governments’ environmental claims,” Mr. Flowers said.

Crews are still demolishing buildings in downtown Lac-Mégantic and locals remain jittery about how much compensation they’ll receive. Property owners downtown have received $37-million from the government. But victims of the disaster have so far received nothing from the companies.

While bankruptcy trustee Robert Keach said he is seeking $500-million for the victims’ fund before Monday’s filing deadline, Mr. Flowers said the decision not to pay by three of the largest corporations linked to the disaster was responsible for the shortfall.

“The main three bad actors, World Fuels, Canadian Pacific Railway and Irving Oil, aren’t contributing a penny to this settlement. We’re going to keep going after them very hard in American court,” said Mr. Flowers.

The three companies have so far denied any responsibility for the 2013 disaster.

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