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Canadian Arctic port and rail company pins hope for revival on oil exports

Oil Train Explosion in Québec

An oil train explosion at Lac Megantic, Québec, in July 2013 killed 47 people. Photograph: Mathieu Belanger/REUTERS


Powered by article titled “Canadian Arctic port and rail company pins hope for revival on oil exports” was written by Suzanne Goldenberg in Churchill, Manitoba, for on Thursday 28th November 2013 13.04 UTC

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.

Oil Trains Across Canada

Oil trains across Canada. Photograph:

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.


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