Oil Train Explosion in Quebec Town Kills Five, 40 Missing

Montreal, Maine & Atlantic Railway Ltd., the company that owned the crude-carrying train that exploded in a Quebec town killing five people, said the derailment may have been caused by the release of the train’s air brakes.

The train, carrying 72 carloads of crude oil, crashed and burst into flames near the center of Lac-Megantic, in the southeastern part of the province early yesterday, forcing the evacuation of 2,000 people, police said. Forty people remain unaccounted for and police said a criminal investigation is under way.

While Montreal, Maine & Atlantic has not completed its own investigation, the company said in a statement the train, which was parked at a station outside the town, was shut down after the engineer left. This “may have resulted in the release of air brakes on the locomotive that was holding the train in place,” the company, a short-line carrier owned by closely held Rail World Inc. of Chicago, said.

The crash is the latest in a series of accidents involving oil on rails as Canadian producers turn to shipping crude by train, with construction of pipelines such as the Keystone XL conduit to the Gulf Coast delayed by environmental and regulatory concerns. TransCanada Corp. (TRP) applied to build Keystone five years ago and the project was initially rejected by the Obama administration in January last year.

‘War Zone’

Canadian Prime Minister Stephen Harper described the destruction in Lac-Megantic as “like a war zone” after touring the site this afternoon. The town of about 6,000 lies about 250 kilometers (155 miles) east of Montreal, and 10 miles from the U.S. border with Maine.

“This is a very big disaster in human terms,” Harper said at a press conference today. “This is an enormous area, 30 buildings completely destroyed and for all intents and purposes incinerated. There isn’t a family here that hasn’t been affected by this.”

Harper said it was too early to apply blame or to discuss financial assistance from the federal government. There are federal laws that govern how funding is distributed in disasters such as this, and Harper said he’ll work with Industry Minister Christian Paradis to determine next steps.

Montreal, Maine & Atlantic said it has a dozen representatives in Lac-Megantic, and is cooperating with government authorities.

‘Crime Scene’

“A big fire like this with enormous damage and many dead, Quebec police must investigate,” Lt. Michel Brunet, a spokesman with the Surete du Quebec provincial police, said at a news conference in Lac-Megantic this morning. “That’s why it’s become a crime scene. Investigators will continue to work and meet with families.”

“You’ve seen the fire, you can deduct the state the bodies are in,” Brunet said. Genevieve Guilbault, a spokeswoman with the coroner’s office, said the team has deployed a multiple-victim unit that has not been used in at least five years.

Thomas Mulcair, leader of Canada’s main opposition New Democratic Party, criticized the Conservative government’s handling of an increase in crude-by-rail shipments.

“We are seeing more and more petroleum products being transported by rail, and there are attendant dangers involved in that,” Mulcair said in Montreal yesterday, CTV television reported. “We are watching a magnificent little village being burned to the ground by toxic products that were being transported through it.”

Local Concerns

The Montreal, Maine & Atlantic train had five locomotive units when it derailed at about 1:15 a.m. local time, the company said in a statement yesterday.

“We have always been aware of the issue of trains passing through our city,” Mayor Colette Roy-Laroche said. “But we’re not the only city where trains go through downtown. Do we say we didn’t have concerns? That’s a lie. What we have demanded is the railway company to observe the rules of maintenance. I can’t tell you the exact condition of it.”

Montreal, Maine & Atlantic was carrying crude to Irving Oil Corp.’s 298,800-barrel-a-day Saint John refinery in New Brunswick, according to a statement on Irving’s website. Joseph McGonigle, vice president of sales and marketing at the train company, did not immediately return an e-mail or phone call.

The refinery, Canada’s largest, is taking as much as 90,000 barrels a day from Alberta and North Dakota, a person familiar with the situation said in December.

Recent Spills

A Canadian Pacific Railway Ltd. (CP) train car carrying petroleum diluent derailed on a buckling bridge over the Bow River that runs through downtown Calgary during flooding last month. A Canadian Pacific train derailed March 27 in Minnesota and another near Jansen in Saskatchewan in May, both spilling crude oil.

Ed Greenberg, a Canadian Pacific spokesman, declined to comment on shipping oil by rail. Edward Burkhardt, president of Rail World Inc., didn’t immediately return telephone messages left at his office today.

“We still have a problem with two tankers but we have made some gains and we hope our strategy is a good one,” said Denis Lauzon, Lac-Megantic’s fire chief. The teams have been using foam as well as water to douse the flames, he said. “We still have a risk of explosion.”

Tanker Fires

More than 100 firefighters have been battling the fires, and have managed to extinguish the flames at three of five tankers, Lauzon said. Firefighters are now able to approach to as close as 100 feet of the extinguished tankers. They must stay at least 500 feet from the two tankers that are still on fire, Lauzon said.

Roy-Laroche said crews were able to repair a “major leak” in a water main overnight to maintain access to drinking water for residents. Even so, the town has ordered residents to boil their drinking water at least 5 minutes as a precaution.

Glen Pilon, an investigator with the Transportation Safety Board of Canada, said the agency has spoken briefly with Montreal, Maine & Atlantic.

“The priority right now is for first-responders to do their jobs,” Pilon said at a conference yesterday. “As soon as they are done we will collect data, we will look for the black boxes and any other materials that will help us in our investigation.”

Train Tied

The locomotive engineer was not on the train when it derailed, Montreal Maine & Atlantic, said in a statement. Early reports indicated the train was stopped and tied down by the engineer for a crew change shortly before midnight Friday night at a station about 6.8 miles west of Lac-Megantic. The engineer went to a hotel and the train moved downhill to where it derailed.

The explosions and fires were concentrated in an area of about 1 square kilometer (0.39 square mile), and many buildings have been affected, said Sergeant Gregory Gomez del Prado, a spokesman with the Quebec police in Montreal. Most evacuees have been sent to stay with relatives, he said. Some people were sent to a nearby school, where the Red Cross has set up a shelter, officials said.

Montreal Maine & Atlantic is working with police and fire services to investigate the accident, Gomez del Prado said. The company owns 510 route miles of track in Maine, Vermont and Quebec and employs about 170 people, according to its website. It operates 15 trains daily with a fleet of 26 locomotives.

To contact the reporter on this story: Eric Lam in Toronto at elam87@bloomberg.net

To contact the editor responsible for this story: Sylvia Wier at swier@bloomberg.net

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