http://www.theguardian.com/environment/2013/nov/28/canadian-arctic-port-and-rail-company-pins-hope-on-oil-exports
[Images and links in on-line articles. While reading these articles,
note that at the moment Canadian railways cannot ship wheat from the
Prairies to Vancouver B.C. where ships are waiting fast enough to keep
up with demand, in part because shipping oil is using up rail line
carrying capacity. Think about that for a second. These guys are
essentially saying the actual rail lines or ship terminals are full to
capacity.
http://www.fool.ca/2013/11/22/canadian-national-and-canadian-pacific-the-two-little-engines-that-couldnt/]
Canadian Arctic port and rail company pins hope for revival on oil exports
Bakken shale shipments across 810-mile railway that shifts over unstable
permafrost raise concerns over safety and wildlife
Suzanne Goldenberg in Churchill, Manitoba
theguardian.com, Thursday 28 November 2013 13.04 GMT
Operators of Canada's only deepwater Arctic sea port say they will
"anchor" its future in the transport of crude oil across remote northern
wilderness and polar bear habitat.
The prospect of transporting crude oil for hundreds of miles on a rail
line that buckles and bends with the unstable permafrost beneath, and
then out to sea in the Arctic, has generated controversy in Canada.
The country is still recovering from a horrific accident last July
involving a runaway oil train.
The explosion in Lac Megantic, Québec, killed 47 people and turned the
town into a fireball.
Now Omnitrax Canada, which owns the rail line to Churchill as well the
port facilities at Hudson bay, said for the first time it sees crude oil
freight as the future of Arctic shipping.
"Think of it as a shopping mall. Grain is one of our anchor tenants and
we hope that oil will be another," Merv Tweed, president of Omnitrax
Canada, said.
The company said it planned to send a first test crude oil shipment
through the port to Rotterdam in mid-2014: loading six separate 80-car
trains with 330,000 barrels of light sweet crude, and then transporting
it across 810 miles of remote terrain to the coast.
The plan has met resistance from provincial authorities in Manitoba. The
conservation department warned of a "catastrophe" for polar bears in the
event of a spill in the northern wilderness or the waters of Hudson bay.
The proposed route for crude oil shipments crosses large seasonal
populations of polar bears, beluga whales, and other wildlife.
"It's going to be one of the biggest catastrophes in the world if we
ever do have a spill… and there is no doubt in my mind, we are going to
have a spill," Daryll Hedman, the regional wildlife manager of Manitoba
Conservation, told a public meeting in October.
Hedman said a spill would create a "perfect storm" for polar bears,
fouling their environment just as the animals are coming off the ice and
into the denning season.
Omnitrax said oil freighted by rail was critical to the survival of
Churchill port in a changing Arctic.
The Hudson bay port offers a more direct route to Europe for shipments
from the mid-west. Like much of the Arctic, ice seasons in Hudson bay
have shortened in recent years.
More than 60 ships travelled through the northern sea route so far this
year, compared with just four making the crossing in 2010.
Tweed said a fall-off in wheat shipments had led the company to begin
seeking new business in the shipment of crude oil.
"We know that we need to have more options than grain. That is something
we have known for a long time now, with the emerging markets for oil and
our ability to ship it," he said.
Omnitrax Canada, a subsidiary of a family-owned firm based in Denver,
bought the track from the Canadian government-owned firm for $11m
(Canadian) in 1997. It then paid a token $10 for the deep water port.
The company said it hoped to move about 3m barrels a year through the
Arctic sea port, as the oil industry looks for new routes to market.
An oil glut has forced down crude oil prices in the mid-west. Delays in
the Keystone XL and other pipeline projects have pushed industry towards
shipping oil out by rail.
In 2009, Canadian producers shipped just 500 cars of oil by rail,
according to the Railway Association. By the end of this year, oil
shipments by rail were expected to hit 140,000 rail cars.
The closest crude oil to Churchill comes from the Bakken shale, which
covers North Dakota and parts of Manitoba and Saskatchewan. North Dakota
is now the second biggest oil-producing state in the US, after Texas,
and ships 70% of its oil by rail.
Tweed insisted repeatedly the company would not initially transport the
heavier crudes produced by Alberta's tar sands, or oil from the US. He
said Omnitrax was looking to carry only light crude oil from the
Canadian portions of the Bakken formation.
But the Lac Megantic derailment, and a handful of other recent accidents
involving oil trains, has brought new exposure to the risks of such
shipments.
Campaigners say there are greater hazards associated with transporting
oil by rail to Churchill than almost anywhere else.
The 810-mile line from The Pas to Churchill crosses a vast expanse of
frozen peat moss topped with more than a foot of permafrost. On much of
that journey, trains travel well below an average speed of 30mph, with
the cars bouncing and swaying over the shifting terrain.
Journeys can be delayed for hours, as tracks expand and buckle. "It
sways and shakes, and derails. It goes slowly, and it goes across
permafrost, which means it is going to change every six months," said
Eric Reder, campaign director at the Wilderness Committee. "There is
nothing any company, or any technology, can do to fix this.
"Any product at all would be better than shipping crude oil."
The line has a long history of accidents, with 66 reported accidents and
other incidents between 2003 and 2012, according to the Transportation
Safety Board of Canada. Most of those involved derailments. There was at
least one minor derailment so far this November at the community of
Wabowden.
There have also been reports of failures in the pipeline system at the
port, which would transfer the oil from rail cars onto the waiting
tankers. A test shipment, initially planned for this autumn, was cancelled.
The company said it plans to spend the winter allaying community's
safety fears and that it is spending around $2m on upgrades at the port.
"We understand the challenges of pushing oil through the rail line
through the north, and doing it safely," he said.
Ultimately, however, Tweed indicated the company would go ahead.
"Obviously, with oil right now we know there is a huge supply in the
market, and getting it to market is the biggest challenge," Tweed said.
"We can help with that."
======================================================================
[But this story suggests yet another twist.]
http://www.winnipegfreepress.com/business/omnitrax-excluded-from-port-promotion-232965391.html
Winnipeg Free Press - PRINT EDITION
Omnitrax excluded from port promotion
Churchill shipper shocked at new development agency
By: Martin Cash
Posted: 11/22/2013 3:21 AM | Comments: 1
As promised in the recent speech from the throne, the province
introduced legislation Thursday that would create a new development
agency for the Port of Churchill.
But the company that actually owns the port and the rail line that links
it to southern Manitoba was left out of the picture.
This might add further fuel to the simmering dispute between the
province and Omnitrax Canada over the company's intention to start
shipping crude oil through the port next year.
Merv Tweed, president of Omnitrax Canada, was clearly not impressed with
the lack of notice.
"There has been some discussion between all the parties about where we
go next but this has caught us a little flat-footed for sure," said Tweed.
Infrastructure and Transportation Minister Steve Ashton said the
proposed new agency, called Churchill Arctic Port Canada Inc., would
represent the evolution of federal and provincial government efforts to
promote the port.
That is currently handled by the Churchill Gateway Development Corp., a
tripartite organization sponsored by the federal and provincial
governments and Omnitrax.
What's being proposed in the new legislation is a non-government agency
governed by a board of directors that will determine how best to achieve
the corporation's mandate.
The legislation came about following a 60-page federal-provincial task
force report on the future of Churchill that came out earlier this year.
Ashton said the agency would promote new developments at the port,
similar to the marketing function CentrePort Canada plays in the inland
port development in Winnipeg.
But the tabling of the legislation is already a little off-putting to
Omnitrax.
"It just seems odd as the sole owner of the port and the rail that we
would not be more intimately involved," said Tweed.
The province and Omnitrax are on a collision course over the company's
stated intention to start shipping oil next year because of what Ashton
says are "significant" safety concerns.
At a presentation to the Manitoba Farm Writers and Broadcasters
Association of Manitoba earlier Thursday, Tweed said his company fully
intends to launch a pilot project for light sweet crude oil in 2014 and
is implementing a series of safety measures.
Tweed said the company will be investing close to $10 million to set up
the pilot project with support from some oil company customers.
Ashton said all sorts of issues, including the potential changes in
Arctic shipping because of global warming, mean there is significant
potential for the port in a way not seen since its inception.
"But at the same time, there is a real need to do it right," said Ashton.
"If you had even one shipment of any commodity, especially hazardous
goods, involved with any kind of major spill anywhere along the supply
chain, it would set back the whole process."
Ashton said the province has a history of co-operating with Omnitrax and
has contributed about $20 million to track upgrades over the past five
years.
"But we do have significant environmental and safety concerns (about oil
shipments to Churchill) and we are not in a position to support that,"
said Ashton.
"We have made that quite clear but that's not to say it's not a
commodity that has been identified that could move through the port."
--
Darryl McMahon
Failure is not an option;
it comes standard.
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