Canadian Pacific Spills Most Oil in Three Months in Saskatchewan

Canadian Pacific Railway Ltd. (CP) rail cars spilled 545 barrels of crude oil near Jansen, Saskatchewan, in the company’s third and largest oil spill in as many months.

Five rail cars derailed and two leaked, with one car emptying its entire contents, Ralph Bock, manager of hazardous materials at the province’s Environment Ministry, said in phone interview from near the accident site. The company spilled a combined 757 barrels in March and April in two accidents in Ontario and Minnesota, Ed Greenberg, a company spokesman in Minneapolis, said in an e-mail.

“CP is building a temporary line around the incident,” Bock said. “That will allow the traffic to flow and then they can do their clearing operations at the incident site.”

Oil shipments are becoming a growing source of profits for Canadian Pacific and other Canadian railroads. Production is outgrowing pipeline infrastructure in Western Canada, and companies are increasingly using rail to avoid transportation bottlenecks.

Canadian Pacific, which operates in six provinces and 13 U.S. states, expects to transport about 70,000 oil carloads this year, an increase of 31 percent from last year, Greenberg said. Each rail car holds roughly 540 barrels of oil.

Canadian Pacific’s average revenue per car gained by 12 percent in the first quarter compared with a year ago, largely because of the increased oil traffic, Jane O’Hagan, the Calgary-based company’s chief marketing officer, said on its April 24 earnings conference call.

Increased Traffic

“We expect this to continue as crude forms a larger part of our book, and, of course, a lot of the growth was driven by crude oil,” O’Hagan said.

Saskatchewan regulators are working with the company to remove the derailed rail cars from the site and to begin clean-up operations, Bock said. One rail car leaked all its contents, while a second rail car leaked a “minor” amount from its hatch before the leak was sealed, he said.

Greenberg said the oil spilled today was produced in Western Canada and didn’t come from the oil sands in Alberta. The shipment was headed eastward, Greenberg said, but he declined to give further details.

To contact the reporter on this story: Edward Welsch in Calgary at ewelsch1@bloomberg.net

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net

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