Winnipeg Free Press - PRINT EDITION

Omnitrax still keen on Churchill oil shipments

Bullish on hauling crude up north despite fall test run being on hold

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ITS plans for a fall test run have been postponed, but Omnitrax remains determined to ship oil on a regular basis through the Port of Churchill beginning as early as next year, a company official said Thursday.

"We're committed to this long-term," Omnitrax president and chief operating officer Darcy Brede said in an interview Thursday.

Brede said a trial shipment of 330,000 barrels of light sweet crude oil that had been planned for this month has been postponed until next July or August to allow for further consultations this fall and winter with First Nations communities and others who have expressed concerns about the potential for a train derailment or oil spill and the impact that could have on the fragile northern environment.

That includes the Manitoba government, which recently withdrew its support for Omnitrax's plan to ship up to 3.3 million barrels of oil per year through the port via the Hudson Bay Railway, which runs from The Pas to Churchill.

Brede said news reports of the province's change in position caught Omnitrax officials by surprise, and company officials are scheduled to meet with provincial Transportation Minister Steve Ashton on Monday to clarify the province's position.

He said Omnitrax, which owns and operates both the port and the railway, was under the impression the province was in favour of it diversifying into the handling of crude oil, provided it has "the most responsible plan possible" in place for preventing a derailment or spill. And the company feels it does, he added.

Steve Ashton said in a written statement Thursday the government supports efforts to diversify shipments of goods through the port as a way of strengthening the local economy and providing long-term jobs.

But Omnitrax's plan to ship oil by rail to the port raises both environmental and rail-safety concerns, the minister said, and there is a growing consensus among the provinces more must be done to improve rail safety, especially in regard to the shipping of hazardous goods. He said the Federal-Provincial Task Force Report on the Future of Churchill also expressed some of the same concerns.

Ashton admitted recently because rail tracks come under federal jurisdiction, the province can do little to stop the shipment of oil through the port. And all Transport Canada has said publicly to this point is Omnitrax would have to comply with all federal regulations governing the safe handling of petroleum products such as crude oil.

Brede said if next summer's trial shipment goes smoothly, Omnitrax hopes to squeeze in a couple more shipments before Hudson Bay freezes over next fall. After that, it hopes to move about 10 shipments per year through the port starting in 2015.

He said the reality is Omnitrax needs another strong product group besides grain to ensure the long-term viability of the port and the railway. And light sweet crude oil is the most viable option at this point because of the North American oil industry's mounting interest in using the port as a way to get crude oil from Western Canada and the northern United States to refineries on the east coast of North America and in Europe.

He said when opposition to its plan began to mount in the wake of last summer's deadly train derailment and fire in Lac-Mégantic, Que., the company realized it wouldn't be able to complete the community consultation process in time to do a trial shipment in October.

He expressed optimism once the company explains the added safety measures it will be taking, community opposition to the plan will fade.

The Pas Mayor Alan McLauchlan confirmed Thursday town officials are satisfied with the extra measures Omnitrax will be taking to ensure oil is transported in a "responsible" manner.

"I'm pleased that it's still going to happen and they haven't given up on it," he added.

Republished from the Winnipeg Free Press print edition October 4, 2013 B6

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