(SOURCE: Portland Press Herald - By Tom Bell)
Irving Oil has stopped shipping crude oil on railroads through Maine and has no plans to revive the practice.
The Canadian company, which operates an oil refinery in Saint John,
New Brunswick, confirmed the policy change in a June 30 email to the
Maine Center for Public Interest Reporting.
The change means there will be no more oil shipments though New
Hampshire and southern and central Maine on Pan Am Railways. In
addition, there will be no more oil shipments on the Eastern Maine
Railway, which connects with Pan Am at Mattawamkeag and continues
through Washington County to the Canadian border.
The cutback is because of global oil-supply-and-demand issues and is
not related to the fallout from the Lac-Megantic rail disaster, Mark
Sherman, Irving’s chief operating officer, told the Maine Center for
Public Interest Reporting. The U.S. demand for Canadian-produced
petroleum products has declined in the wake of an oversupply of oil from
domestic and Mideast sources.
In 2012, Maine railroads shipped 5.2 million barrels of crude oil,
but shipments declined sharply after the July 6, 2013 accident in
Lac-Megantic, Quebec, when an unattended 74-car freight train carrying
Bakken crude oil rolled and derailed, resulting in a fire and explosion
that killed 47 people.
The railroad involved in the disaster, the Montreal, Maine &
Atlantic Railway, never carried oil again and went bankrupt. Its
successor, the Central Maine & Quebec Railway, also has never
carried oil because of political opposition in Lac-Megantic.
Pan Am, whose trains travel through Portland, carried just 15,545
barrels of oil in all of 2014, according to records the company filed
with the Maine Department of Environmental Protection. In 2015, Pan Am
has carried 37,128 barrels. All those shipments occurred in February,
the last month the railroad delivered oil to the Irving refinery,
according to the Maine Center for Public Interest Reporting.
An official with Pan Am could not immediately be reached for comment.
John Giles, CEO of Central Maine & Quebec Railway, had been
seeking an agreement with Lac-Megantic officials to restart oil train
shipments through the Canadian town. On Tuesday, Giles said the railroad
does not need to carry oil to be profitable.
“I was never counting on moving crude oil in the first place,” Giles said.
Giles said his railroad spent $10 million to upgrade the rail line
last year and is spending $6 million this year, with about half of that
investment in Maine.
An investigation after the Lac-Megantic accident found that the
tank-car labels understated the flammability of the oil. Twenty-five
companies have offered a total of $431 million (Canadian) to settle
lawsuits arising out of the disaster. Irving Oil’s contribution is $75
million. The settlement is being considered by U.S. and Canadian courts.