Canada will take older tank cars out of crude-by-rail service much earlier than originally planned, the government said on July 25, in its latest move to toughen rail safety after a deadly 2013 crash.
Some older tankers, called DOT-111 cars, had been scheduled to go out of service on May 1, 2017. A version jacketed with an extra layer of metal to make it stronger was set to be phased out on March 1, 2018.
Both types of cars will now be taken out of service by Nov. 1, 2016, said Delphine Denis, a spokeswoman with the office of Transport Minister Marc Garneau.
Garneau is set to announce the change on July 25. Denis said there are about 28,000 affected cars in crude oil service in North America.
Accident investigators have said the cars tend to puncture during derailments, sometimes causing fires. The train that derailed and exploded, leveling part of the Quebec town of Lac-Megantic and killing 47 people in 2013, was made up of DOT-111 tank cars.
The change moves Canada's retrofit schedule ahead of the U.S., limiting the number of cars that can be used on cross-border routes.
"All rail tank cars transporting flammable liquids entering Canada, whether in transit or as a final destination, must meet the Canadian phase-out schedule," the minister's office said in a statement.
Under a regulation finalized in May 2015, the U.S. would let DOT-111 cars carry oil in the more dangerous packing group I classification until January or March 2018. It would let crude in the less dangerous packing group II category be transported in DOT-111 cars as late as May 2023.
Tom Williamson, a Florida-based broker and owner of Transportation Consultants, said the new deadlines would not likely lead to tank car shortages.
"We are just swimming in tank cars right now, so I am not sure any regulatory adjustment can have an impact," Williamson said. "I have never seen so many offers for leases in my career. If we get one request for a lease, I have 15 offers."
The sharp decline in the price of oil since 2014 has cut crude-by-rail shipments. In the first two quarters, Canadian Pacific Railway Ltd. saw volumes drop 41%.
U.S. crude-by-rail volumes were 427,000 barrels per day (Mbbl/d) in April, down from a peak of 1.1 MMbbl/d in 2014, according to data from the U.S. Energy Information Administration.
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