CP Rail CEO Says Biggest Crude-by-Rail Fear Is Terrorism
Hunter Harrison, Canadian Pacific Railway’s chief executive officer, said his greatest fear in moving crude by rail is the prospect of a terrorist attack on the company’s trains.
“That’s what concerns me more because it can be planned to do the worst possible damage,” Harrison told reporters after a speech in Toronto.
Canadian and U.S. transportation regulators are drafting tougher standards for oil tank cars as record volumes of the commodity are moving across the continent from oil fields in Western Canada and the U.S. New regulation was prompted by the explosion in Lac Megantic, Quebec, in 2013 that killed 47 people.
There have been recent incidents too. Last month, a CSX Corp. train carrying crude derailed and exploded in West Virginia shortly after a derailed Canadian National Railway Co. train caught fire near Gogama, Ontario.
CP has taken “quantum leaps” to reduce spills by improving the quality of the rail cars it runs and the routes they take to ensure they run through less populated areas, Harrison said. The company has tried to move crude shipments out of major centers, like Chicago, as much as possible.
Harrison said if a third party or a terrorist decided to target the trains though it would be hard to protect against.
“It’s a serious situation that we need to address,” he said, adding that it is difficult to get those changes done in a timely fashion in Ottawa and Washington.
CP staff is being trained in the meantime how best to react as first responders and to work with local authorities.
The Canadian government is overhauling its safety rules for crude oil shipments, creating a disaster fund and requiring railways to carry as much as C$1 billion ($800 million) in insurance, depending on the volume and type of dangerous goods being carried, among other safety measures.
Harrison said he agreed with the federal Transportation Safety Board conclusion last month that the latest rail car standard implemented after the Lac Megantic disaster may not go far enough. The board noted during its investigation into the CN derailment near Gogama on Feb. 14 that the derailed cars involved in the blaze complied with the latest standards.
“I think that it’s proven that some of the results have not worked the way they should,” Harrison said.
Harrison was appointed CEO after a proxy battle led by Bill Ackman. He has since overhauled the company’s operations and improved profitability. The shares have climbed more than 200 percent since his appointment.
Harrison has also been advocating for further consolidation in the rail industry in recent months. CP acknowledged holding exploratory talks about a possible business combination with CSX before those discussions broke off last October.
He said he didn’t believe CP would be involved in any consolidation anytime soon.
“Nobody wants to do a deal,” he said.
