Canadian Manufacturing

Lac-Megantic: Quebec now demanding cleanup cash from CP Rail

by The Canadian Press   

Canadian Manufacturing
Environment Operations Supply Chain Energy Oil & Gas Transportation disaster environment Lac-Megantic rail

Rail giant named in legal notice because it was main contractor involved in disaster, government claims

MONTREAL—The Quebec government added the Canadian Pacific Railway to its list of legal targets, casting a wider net to recover millions of dollars in cleanup costs from the Lac-Megantic disaster.

The big railway is now among several companies listed on a legal notice first issued last month by the provincial government, a document demanding that firms pay for the massive mop-up after millions of litres of crude oil gushed into the environment.

CP was included as one of the defendants because, the government said, it was the main contractor responsible for the fateful shipment that was supposed to send the cargo from North Dakota to a New Brunswick oil refinery.

It handed off the train in Montreal to the smaller Montreal, Maine & Atlantic (MMA) Railway Ltd., which then operated the tanker train that jumped the tracks in Lac-Megantic, Que., July 6.


The disaster killed 47 people and prompted a mass evacuation, a criminal investigation, lawsuits, and concerns that the community of 6,000 might have to abandon its downtown core.

The province had already named MMA and its Canadian subsidiary in the initial July 29 legal notice, but both companies have since filed for bankruptcy protection after stating they could not pay the mounting cleanup costs and multiple lawsuit attempts.

In one court filing, MMA said its insurance coverage was $25-million and estimated the cleanup cost would climb past $200-million.

By adding CP to its legal notice, the Quebec government locked in on a bigger target than MMA, one with much deeper pockets.

“Our duty is to do everything we can to ensure that the companies responsible for this accident might shoulder the costs related to the cleanup and decontamination,” Environment Minister Yves-Francois Blanchet said in a statement.

The province also added another firm to the notice: World Fuel Services Inc., which is a subsidiary of the petroleum-logistics firm World Fuel Services Corp.

The parent company and another subsidiary, Western Petroleum Company, were listed in the initial demand from the government.

The Miami-based World Fuel Services had bought the crude oil that was to be shipped to the Irving refinery in St. John, N.B.

World Fuel Services Inc. and CP were asked to confirm within 24 hours whether they will execute the order, which falls under a Quebec environmental law.

“(CP) just received the order and we are currently reviewing it,” said Ed Greenberg, a spokesman for the railway.

World Fuel Services, meanwhile, would not immediately issue a comment on the addition of its subsidiary to the notice.

In a statement released last month, the parent company said it had not expected to be named in any government action and indicated it had “serious objections to the legality of the order.”

World Fuel Services, Western Petroleum Company and MMA are among 10 defendants listed in several wrongful-death lawsuits filed last month in an Illinois court.

Both World Fuel Services and MMA have also been named in a proposed class-action suit in Quebec.

The municipality of Lac-Megantic sent lawyers’ letters to MMA last month demanding that it shell out for cleanup costs or it would face legal action.

The first letter called for $4-million to cover the tab, an amount later increased to nearly $8-million.

With battle lines being drawn over cleanup costs, another debate erupted over just how much pollution remained in the local environment.

The provincial government downplayed concerns about the extent of the long-term environmental damage from the disaster.

Quebec’s Environment Department released a series of charts listing the level of various pollutants in the water and air in the area.

It said the government statistics show, in most cases, that the concentrations had returned to the same levels they were before the July 6 derailment.

That announcement came one day after the release of a report by an NGO, linked to Greenpeace, that detected significant amounts of pollutants in the neighbouring Chaudiere River.

For instance, the NGO report announced a presence of carcinogenic polycyclic aromatic hydrocarbons at the water’s surface that was more than 394,000 times greater than what is considered safe by the Environment Department.

The new government figures rebut some of those claims, but with one notable exception.

The provincial data also show a high concentration of hydrocarbons away from the water’s surface, as did the NGO, whose acronym is SVP.

“These could certainly float off the banks, and up from the riverbed, in the event of floods or of abrupt changes in water levels,” said the government statement.


Stories continue below