Canadian National’s main line shuts after crude cars derail

Canadian National Railway Co. shut its main line linking western and eastern Canada after an eastbound train carrying crude oil derailed in Ontario.

The train of 100 cars, all carrying crude from Canada’s oil-producing region of Alberta to eastern Canada, derailed just before midnight Saturday in a remote and wooded area about 30 miles north of Gogama, Ontario, spokesman Patrick Waldron said in an e-mail. About 18 freight trains a day use the line, he said. A total of 29 cars were involved in the incident and seven caught fire. The remaining 71 cars were moved from the site, Waldron said. Some oil was spilled.

Shipments scheduled along the affected corridor will be delayed by at least 24 hours, the company said.

Canadian oil producers have grown dependent on shipping crude by rail as pipeline capacity has become constrained. The shutdown happened as locomotive engineers and conductors walked off the job at Canadian Pacific Railway Ltd., the country’s second major rail carrier, in a move that threatens to snarl carload traffic across the country.

“There might be a push for more pipeline infrastructure because the rail system that we have been relying on for a long time, the cracks are starting to show,” Carl Larry, Houston- based director of oil and gas at Frost & Sullivan, said in a telephone interview.

The Canadian National derailment may impede crude shipments to eastern Canada, where about two-thirds of the country’s refining capacity is located, according to Canadian Fuels Association data. The rail network also links up with lines extending down into the U.S. Midwest and Gulf Coast. The typical rail car carries about 700 barrels of oil, according to data posted on BNSF Railway Co website.

Rail companies including Canadian National and Canadian Pacific shipped 182,000 barrels a day in the third quarter, up from 163,000 barrels a day in the second, according to Canadian National Energy Board data.

The derailment occurred along the Ruel subdivision of the main line, obstructing trains running between Montreal and Winnipeg, the rail company said. Emergency crews are conducting an assessment at the derailment site to determine the number of cars derailed and involved in fire, Waldron said.