Irving Ends Rail Shipping of Crude Oil Through Maine

(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.