Here’s why oil train derailments and pipeline spills keep happening
By Professors Liette Gilbert and Anna Zalik
In the midst of global upheaval, recent oil spills in Canada have received little attention.
These spills occurred as governments, both federal and provincial — notably Alberta and Ontario (which later reversed the suspension) — suspended environmental regulations for the oil and gas sector, mirroring suspensions in the U.S. But the recent Saskatchewan train derailments and Trans Mountain pipeline spill point at how dangerous it is to allow these events to be swept under the rug, given the hazards of an already weak regulatory system.
As the seven year anniversary of the Lac-Mégantic disaster passes, and in the midst of plans for expanding pipeline infrastructure across the country, it is important to reflect on the regulations which followed in the aftermath of the Lac-Mégantic disaster.
The general assumption is that regulatory changes enacted in response to disaster and protest were intended to make oil and gas transportation safer. But these regulations have little to do with reducing risks to the public, and much more to do with reduction of financial risk in a form that makes hydrocarbon transport economically viable by shaping the conditions around their insurance.
Regulation in the corporate interest
In the immediate aftermath of the Lac-Mégantic disaster, and upon the technical recommendations of the Transportation Safety Board of Canada, Transport Canada updated key operating procedures and regulations. Further legislation was introduced to amend the Transportation Act and the Railway Safety Act in 2015, expanding minimum insurance requirement for railways hauling dangerous goods, and the creation of a compensation fund financed by levies on crude oil shippers, as well as increased information-sharing provisions with municipalities and first responders (even though such information remains limited and inaccessible to the larger public).
A key outcome of the 2015 Pipeline Safety Act was to set liability at a maximum of $1 billion for all pipelines with capacity to transport 250,000 barrels per day, leveling the insurance requirements across pipeline firms.
But there is little incentive for railway companies and pipeline firms to take public safety seriously. In the case of the railway safety act, monetary penalties for contravening the Railway Safety Act or rules and regulations are minimal (and generally appealed). Meanwhile increased oil-by-rail transportation has boosted railway companies’ profits.
Although large and small railway companies have varied capacity to develop safety management systems, the size of companies does not prevent derailments as they all operate with staff cutbacks, lack of maintenance and chronic underinvestment in equipment and infrastructure, as the Saskatchewan derailments demonstrate.
For pipelines, incidents have increased since the 2015 pipeline safety act took effect, yet these incidents are complicated to track due to highly inconsistent reporting structures.
Infrastructural investment to ensure safety would require either that the private sector is willing to forego profits given the costs involved in proper equipment maintenance, or state subsidies to underwrite these costs.
The recent $4.5-billion purchase of the Kinder Morgan pipeline by the Canadian state illustrates the extent to which the government is prepared to make huge expenditures to bring oil to market and underwrite the sector overall, but instead of similar investments in safety the federal government has rolled back the rules, further externalizing costs to humans and the environment.
Austerity has covered for reduced monitoring of safety compliance and rule enforcement, shifting from a prescriptive regulatory approach to corporate self-monitoring. This reduction in safety management has been particularly problematic as companies increasingly transport dangerous goods and crude oil across the continent and as pipelines have aged.
There is a fundamental gap in implementation given that companies themselves are expected to inspect and audit their own systems, making results available to the regulator as part of the audit or inspection processes. Safety management systems are subject to Transport Canada audits but the agency does not approve whether the safety measures and risk management established by the companies are appropriate; they simply make sure that a plan is submitted.
The lack of inspections by independent monitoring agencies is a major area of weakness in the regulatory process. To make the audit process substantive would, in effect, not only require reporting but also periodic inspections leading to action. A 2013 report by the auditor general of Canada (completed just days before the tragedy in Lac-Mégantic) revealed problems with continuous safety issues, oversight of safety management systems and collection of data on safety performance.
As tragically illustrated by the derailment in Lac-Mégantic, and subsequent CN and CP derailments in Gainford, Alberta; Plaster Rock, New Brunswick; Gogama in northern Ontario; near Gurnsey, Saskatchewan; and Emo, Ontario, among many others, transporting oil by rail remains hazardous.
As is the case with pipeline risks, the land affected by spills and accidents is Indigenous land, further demonstrating what the COVID conjuncture has brought to the fore — that the inadequacies of state regulations are shaped by a long history of systemic racism.
Inconsistent and misleading reporting
For both rail and pipeline transportation, the categorization of spills and the presentation of data on these spills obscures the extent of the problem.
Derailments are officially treated as “accidents” or “incidents” rather than what Eric de Place and Rich Feldman called a “self-reinforcing chain of events and conditions caused by underinvestment, lack of maintenance, and staff cutbacks” and the regulator’s unwillingness to engage with the systemic problems related to oil extraction and transportation.
Safety data is difficult to access and not comparable nationally. In the case of both rail and pipelines, the definitional distinction between “incident” and “accident” is not only unclear, but also distracts attention from increasing hazards.
The term “railway occurrence” is employed to refer to what the Transportation Safety Board of Canada calls “any accident or incident associated with the operation of rolling stock on a railway, or situation or condition that the Board has reasonable grounds to believe, could, if left unattended, induce an accident or incident.” With this vague term, the TSBA recognizes a certain inevitability and failure of their operations, which completely disregards the people experiencing the too often tragic consequences of crude oil tank cars derailing, burning and exploding.
The situation is even worse for pipelines. A 2014 report to energy ministers clearly states that “there is no standard definition for a ‘pipeline incident’ in Canadian law. Definitions vary by jurisdiction, which can influence the scale, scope, and pace of a response.”
Notable, however, is that in response to public concerns, the release of data by government ministries has been not only partial but also presented in a highly misleading form. Overlapping provincial and federal jurisdiction for pipeline monitoring and spill remediation contributes to lax accountability, allowing regulators to shift responsibility onto other levels of government.
The definitional inconsistency between railways and pipelines creates an empirical gap. As there are no standard criteria for reporting on accidents, data cannot be combined in a form that allows for a consistent, nationwide database.
The currently posted TSBA data tables on pipeline spills and incidents are presented in a misleading and incongruous form. 2017 TSBA data are now presented in TSBA tables in a different format and order than that of the TSBA tables we examined and presented in a 2019 publication.
Notably, the Canada Energy Regulator now compiles and presents data on pipeline incidents nationally via an interactive online data visualization initiative, which, arguably, is incredibly opaque in presentation.
Importantly, with the exception of the past two years, the numbers of “accidents” recorded for the 10 preceding years are now considerably higher than those reported in 2017.
Inconsistencies in reported data constitute a major obstacle to the possibility of substantive monitoring and auditing even though the information superficially provides some social-psychological comfort to regulators and the public.
In a context of highly inadequate information, incomplete data renders audit practices substantively hollow. Meanwhile the dangers that spills cause to the public — in particular those in lower income, Indigenous and rural populations — only intensify.