On October 17, 2013, Transport Canada issued Protective Direction No. 31 (the
"Direction") pursuant to section 32 of the Transportation
of Dangerous Goods Act, 1992. The Direction is in response to the
Lac-Mégantic disaster on July 6, 2013, in which a train
transporting crude oil derailed, resulting in a fire that caused
several of the railcars to explode. The downtown core of
Lac-Mégantic, a historic town in Quebec, was largely
destroyed and at least 42 lives were tragically lost.
Testing conducted after the disaster revealed that the crude oil
in the derailed railcars had been incorrectly classified in
The Direction requires any person engaged in importing or
offering crude oil for transport to immediately test the
classification of that crude oil, if that testing has not been
conducted since July 7, 2013. The test results must be provided to
Transport Canada on request.
Offering crude oil for transport means to select or allow the
selection of a carrier to transport the crude oil, to prepare or
allow the preparation of the crude oil so that a carrier can take
possession of it for transport, or to allow a carrier to take
possession of the crude oil for transport.
Until the testing is complete, crude oil transported by rail
must be shipped as Class 3 Flammable Liquid Packing Group I. This
is the classification required for the most flammable of liquids.
Testing will determine whether a classification for less flammable
liquids may be used.
Following testing, the person offering the crude oil for
transport must immediately provide a Safety Data Sheet for the
tested product to Transport Canada through the Canadian Transport
Emergency Centre (also known as CANUTEC).
In the wake of the Lac-Mégantic disaster, Transport
Canada has indicated it will further enhance the safety of railway
operations and dangerous goods transportation in Canada. With the
increasing reliance on rail to ship crude oil across North America,
companies wanting to transport crude oil must ensure they are aware
of and follow the requirements of the Transportation of Dangerous
Goods Act, and its regulations and standards, in order to reduce
the risk of accidents and to avoid liability.
Classification testing of crude oil has always been required by
the Transportation of Dangerous Goods Regulations. The Direction
reinforces this existing requirement. However, the importance of
the Direction is that it provides for the default classification of
crude oil being shipped by rail where classification testing has
not been completed since July 7, 2013.
We expect additional regulation in the near future to address
safety issues regarding the increasing use of railcars to transport
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The Alberta Court of Appeal's decision in Bokenfohr v Pembina Pipeline Corporation, 2016 ABCA 382 provides an important reflection on admissibility of evidence in the permission stage of an appeal in the oil and gas context.
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