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Feds vow 'ambitious' phase-out of unsafe rail tank cars amid industry questions

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OTTAWA - The federal government announced an aggressive — some say unrealistic — plan Wednesday to phase out within three years tens of thousands of older tank cars used to transport oil and ethanol by rail.

Transport Minister Lisa Raitt said about 5,000 of the most dangerous tank cars will be pulled off the tracks within a month, part of a series of measures in response to recommendations by the Transportation Safety Board in the wake of last summer's deadly derailment and fire in Lac Megantic, Que.

"We are always committed to improving railway safety and the transportation of dangerous goods by rail," Raitt told a news conference.

Rail carriers will also be required to prepare emergency response assistance plans for shipments of all petroleum products — everything from crude oil to diesel. A single car in a train would trigger the need for such a plan, said Raitt.

Emergency response is to be improved across the country through a task force involving municipalities, first responders, railways and shippers.

And Raitt says there will be changes to insurance rules so that, in the event of an accident, there will be enough to cover compensation and cleanup costs without tapping the public purse.

But the headline promise on tank cars is also the most problematic.

There are an estimated 65,000 of the older cars, known as DOT-111s, currently hauling oil or ethanol in a largely integrated North American fleet — up to a third of which are being used in Canada at any given time.

The cars cross the border almost daily, industry insiders said Wednesday.

But unlike an earlier joint Canada-U.S. rail safety announcement in January, the U.S. Department of Transport has not yet decided how to address the issue of unsafe DOT-111s.

Since 2011, the rail industry has voluntarily adopted tougher safety standards for all new cars, but with literally only a handful of tank car-makers in North America and a huge boom in oil-by-rail shipments, demand far outstrips supply.

"Three years is the amount of time that we thought was the best saw-off between what industry said that they could do and what is wanted by the Transportation Safety Board," said Raitt.

"I'm sure if you asked industry, they're going to say it's ambitious in terms of the amount of goods that are being moved in crude or in ethanol currently."

The Railway Association of Canada did not agree to an interview Wednesday but responded with a cautiously worded statement saying "a three-year phase-out for legacy tank cars marks an important step toward a fleet of cars that will enhance safety."

Canadian Pacific (TSX:CP) said it welcomes the announcement about older DOT-111 tank cars, but called the government's plan incomplete.

”We applaud the Minister of Transport's direction to eliminate the use of older tank cars," said CEO E. Hunter Harrison in a statement late Wednesday.

But he added that "human behaviours are a significant factor and should be the focus if the goal is to truly improve safety."

Larry Beirlein, a Washington-based lawyer with the Association of Hazmat Shippers, literally laughed out loud when told of Transport Canada's three-year deadline.

"And the sun will rise in the west!" Beirlein guffawed.

"There aren't that many car builders who can replace 20,000 cars," said Beirlein, whose organization uses tank cars for everything from oil to nail polish.

"There just aren't that many facilities capable of doing that kind of work, as well as repair of existing equipment. It's not like you can do it at the corner gas station."

The U.S.-based Railway Supply Institute, whose members build more than 95 per cent of all North American tank cars and lease more than 70 per cent, said about 55,000 new tank cars will have been put in service between 2011 — when the new voluntary safety standards were adopted — and 2015.

"Harmonization between the Canadian and U.S. regulations is critical to maintaining a viable North American transportation system," institute president Tom Simpson said in a release.

"We will review the full details of Transport Canada's regulations as soon as they are released and will work closely with both the railroad industry and the government to improve tank car safety."

Liberal transport critic David McGuinty said the government's ambitious timeline for replacing the unsafe cars is unachievable, and they know it, but it punts "a dangerous issue for the Conservatives" past the 2015 election.

"I think they're politicking," said McGuinty.

Greenpeace Canada, meanwhile, issued a release saying the older DOT-111s should be banned immediately.

Raitt's actions are the latest response to last summer's horrific derailment and fire in Lac Megantic that claimed 47 lives.

Concerns about the safety of DOT-111 tank cars date back to the mid-1990s, when the Transportation Safety Board recommended Transport Canada "take immediate action to further reduce the potential for the accidental release of the most toxic and volatile dangerous goods transported in Class 111A tank cars."

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