Canada to require more oil/rail insurance, special fund
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(Reuters) — Canada will boost the minimum insurance railways will have to carry when they haul crude oil, and an additional fund will be set up with levies on oil shipments to cover major disasters, under legislation to be introduced on Friday, two sources familiar with the bill said.
The legislation is in reaction to a spate of oil-by-rail accidents, the most prominent being the 2013 explosion of a runaway train in the Quebec village of Lac-Megantic that leveled the heart of the town and killed 47 people.
The government recently gave notice of intention to introduce “An Act to amend the Canada Transportation Act and the Railway Safety Act.”
The costs of the cleanup and reconstruction for Lac-Megantic far exceeded the C$25 million ($20.1 million) insurance carried by the Montreal, Maine & Atlantic Railway, driving the railroad into bankruptcy and leaving federal and provincial governments to pick up the tab.
A government official told Reuters last year that Ottawa was considering something loosely based on the Ship-Source Oil Pollution Fund, set up in the 1970s to cover big maritime oil disasters and financed with levies on oil tanker shipments.
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