The Joplin Globe, Joplin, MO

Business

August 14, 2013

Railway in Quebec train to lose license

TORONTO — Canada’s transportation agency said Tuesday it will suspend the operating license of the U.S.-based rail company whose runaway oil train derailed and exploded in a Quebec town, killing 47 people.

The agency said it planned to take away the certificate of fitness for the Montreal, Maine & Atlantic Railway and its Canadian subsidiary, effective Aug. 20.

The transportation agency said it wasn’t satisfied that the troubled company, which has filed for bankruptcy since the July 6 disaster, has demonstrated that its third-party liability insurance is adequate for ongoing operations.

The parked train, with 72 tankers of crude oil, was unattended when it began rolling and derailed in the center of Lac-Megantic. Several tankers exploded, destroying 40 buildings. The company has blamed the train’s operator for failing to set enough hand brakes.

The agency said the disaster has raised questions about the growing use of rail transport for oil, including important ones regarding the adequacy of third-party liability insurance coverage to deal with catastrophic events, especially for smaller railways.  

“This was not a decision made lightly, as it affects the economies of communities along the railway, employees of MMA and MMAC, as well as the shippers who depend on rail services,” Geoff Hare, the agency’s chief executive, said in a statement.

Spokeswoman Jacqueline Bannister said the transportation agency could reconsider its decision if the railway demonstrates they have sufficient insurance. Bannister said the company did provide some information to the agency, but they did not get all the information requested. She said they were looking to see if the railway was able to restore their insurance level to at least what existed prior to the derailment, but the railway failed to do so. MMA and MMAC were informed of the decision Tuesday morning before the public announcement, she said.

In the wake of the disaster, the regulator has also announced plans to review the insurance coverage of federally regulated railways this fall, given sharp increase in shipments of crude oil in recent years. This year, more trains carrying crude will chug across North America than ever before — nearly 1,400 carloads a day. In 2009, there were just 31 carloads a day.

Bannister said they will consult with the railway and insurance industries during the review.

“We have to be satisfied that the insurance coverage is sufficient,” he said.  

In its bankruptcy filings, the Canadian subsidiary said it only had $25 million in insurance coverage, while estimating the environmental cleanup alone will exceed $200 million. The railway and its Canadian counterpart, Montreal, Maine & Atlantic Canada Co., also cited debts to more than 200 creditors following the disaster.

Messages left at the office of MMA chairman Ed Burkhardt were not immediately returned.

Lac-Megantic and the Quebec government have sent legal notices to the railway, demanding it reimburse the town nearly $8 million in environmental cleanup costs.

Pierre Arseneau, a union representative for MMA workers in Quebec, said he was disappointed the railway will lose its operating license next week, but he understands the importance of having sufficient insurance coverage. Arseneau, a member of the United Steelworkers, is concerned about the dozens of jobs at stake and hopes another operator will take over the railroad quickly.

Twenty-four of the railway’s 75 employees in Quebec have already lost their jobs since the derailment, but Arseneau fears the impact of the suspension could reach well beyond MMA if a solution isn’t found quickly. “It’s also the whole economy of the region,” Arseneau said. “There are lots of companies that depend on the railroad.”

The Canadian decision had no immediate effect across the border because the severed rail line meant Maine shippers have had to reroute traffic.

The U.S. Surface Transportation Board could step in to appoint someone to operate the line if Montreal, Maine & Atlantic stops rail service or if the service deteriorates, said Nate Moulton, rail director for the Maine Department of Transportation.

But MM&A already announced intentions to sell the rail line to another party to generate money to pay its debts, Moulton said.

 

1
Text Only
Business
  • Business US stocks close higher for third day in a row

    Investors drove stock prices to their highest level in a week Wednesday,

    April 16, 2014 1 Photo

  • China’s growth slows to 7.4 percent in 1Q

    China’s economic growth slowed further in the latest quarter but appeared strong enough to satisfy Chinese leaders who are trying to put the country on a more sustainable path without politically dangerous job losses.

    April 16, 2014

  • A look at 3 minority business mentoring programs

    A look at minority business mentoring programs, called accelerators, in three metropolitan areas.

    April 16, 2014

  • Why high oil prices are actually good for airlines

    Airline executives frequently complain about fuel costs. But the truth is higher prices actually have been good for business.

    April 16, 2014

  • Business US stocks open higher; Yahoo soars in early trade

    U.S. stocks moved higher in early trading on Wednesday, extending their gains into a third day. Investors welcomed solid earnings from Yahoo as well as some encouraging news about China’s economy and U.S. factory production.

    April 16, 2014 1 Photo

  • Detroit strikes second deal with its other retirees

    The city of Detroit reached tentative agreements to preserve pensions for retired police office and firefighters but cut monthly payments for other former employees, key deals that could accelerate the largest public bankruptcy in U.S. history, officials said Tuesday.

    April 16, 2014

  • Missouri court expands legal rights for injured workers

    The Missouri Supreme Court has overturned 30 years of precedent with a ruling that gives greater legal protections to injured workers who are fired from their jobs.

    April 15, 2014

  • Immigration activists urge Obama to act boldly

    Latinos and immigration activists are warning of political peril for President Barack Obama and Democrats in the fall election unless the president acts boldly and soon to curb deportations and allow more immigrants to remain legally in the U.S.

    April 15, 2014

  • Farmers off to slow start planting corn crop

    Spring planting across the nation’s Corn Belt is sputtering because the soil remains too soggy or cold for effective seeding.

    April 15, 2014

  • Schreiber Foods schedules Carthage plant expansion

    Plans to expand a Schreiber Foods plant to eventually add 160 new jobs have been endorsed by a Carthage committee working with the company. Andrew Tobish, director of combinations for Schreiber, which is based in Green Bay, Wis., confirmed the project, which he said would be complete by late spring or early summer in 2015.

    April 15, 2014

Poll

The Supreme Court may take up a challenge to an Ohio law that bars false statements about political candidates during a campaign. Do you think false accusations made in the heat of an election should be punished as a crime?

A. Yes.
B. No.
     View Results
Facebook
Twitter Updates
Follow us on twitter
NDN Video
Disbanding Muslim Surveillance Draws Praise Hundreds Missing After South Korean Ferry Sinks Passengers Abuzz After Plane Hits Swarm of Bees Boston Bomb Scare Defendant Appears in Court Pistorius Trial: Adjourned Until May 5 Diaz Gets Physical for New Comedy Raw: Ferry Sinks Off South Korean Coast Town, Victims Remember Texas Blast Freeze Leaves Florida Panhandle With Dead Trees At Boston Marathon, a Chance to Finally Finish Are School Dress Codes Too Strict? Raw: Fatal Ferry Boat Accident Suspicious Bags Found Near Marathon Finish Line Boston Marks the 1st Anniversary of Bombing NYPD Ends Muslim Surveillance Program 8-year-old Boy Gets His Wish: Fly Like Iron Man Sex Offenders Arrested in Slayings of CA Women India's Transgenders Celebrate Historic Ruling Tributes Mark Boston Bombing Anniversary Raw: Kan. Shooting Suspect Faces Judge