Canada’s chemical shippers face a busy time ahead. The industry is poised for growth - with the potential to attract up to $10 billion in new investment over the next decade, according to the Chemistry Industry Association of Canada.
Relying on feedstock from the oil and gas, electricity, mining and biomass sectors, Canada’s chemistry industry is the world’s largest exporter of sodium chlorate and sulphuric acid, the second-largest exporter of ethylene glycol, and the fourth-largest exporter of polyethylene. It’s also Canada’s third-largest exporter of manufactured goods – exporting $30 billion worth of products in 2012, the association noted.
Fiona Cook, Director, Business and Economics, with the Chemistry Industry Association of Canada, said that with the safety, liability and compensation issues that have emerged from the Lac Mégantic train derailment almost a year ago, “I don’t think we’ve ever seen it this busy before.”
In April the association, part of the Coalition of Rail Shippers, called on the government, following its introduction of the Fair Rail for Grain Growers Act, to address broader issues faced across the system, versus favouring a sector-by-sector approach to rail transport.
The Canada Transportation Act was set to be examined in 2015, but earlier this year the federal government pledged to move the timeline up. On June 25, Transport Canada named the arm’s length review committee whose job it will be to dissect the legislation. Chairing the committee will be former MP and cabinet minister David Emerson.
“I think we’re going to ask for some definition around service level agreements. We hope that rail gets a focus. Our key concern is that Transport Canada is severely under-resourced at the moment-do they have the capacity to deal with this in a thorough way?” said Cook.
The association has also urged the rail industry to work collaboratively with shippers.
A railcar shortage this winter saw chemical plants slow down or shut temporarily over the winter, and Cook said that association members like to have a collaborative approach with rail on the improvement of services.
“Some companies have no complaints and others do. The issues are particularly concentrated in the west where there is a focus on agriculture right now. There is still difficulty getting the railways to commit to service agreements or to measure service levels. We have a general commitment to keep working and improve this,” Cook said.
Dave Saucier, Manager, Regulatory and Government Affairs, with the Canadian Association of Chemical Distributors, said the CACD is closely involved with the federal government’s Regulatory Cooperation Council, set up as part of the broader Beyond the Border Action Plan, with aim to align regulations between Canada and the US.
The CACD counts some 46 member companies operating 171 sites across Canada, who are significant importers and exporters of chemical substances between Canada and the US.
CACD has applauded the inclusion of the harmonization of the Workplace Hazardous Materials Information with the US’s Hazcom 2012, that ushers in alignment to the Globally Harmonized System (GHS), and alignment efforts on nanomaterials are also moving along on track and on time, noted Saucier.
“The second initiative is the next iteration of WHMIS which sets the table for alignment for the future transport of dangerous goods. We’re hoping the RCC will get involved with regulations forthcoming from the Lac Mégantic disaster. There are similar approaches in Canada and the US but I think Canada is taking a much more aggressive approach. Transport Canada has used their Protective Directions power permitting them to take action without having to go through the regulatory process. So they put through protective directions that have certainly some consequences to the chemical supply chain,” Saucier said.
Emergency response assistance plans, a system unique to Canada, will be expanded upon. On June 20, Transport Canada announced forthcoming amendments to the Transportation of Dangerous Goods Regulations which include provisions to harmonize placarding requirements with the United States while at the same time providing more accurate information on the types of Dangerous Goods being transported, primarily for the purposes of first responders.
Federal Transport Minister Lisa Raitt made the announcement at a press conference held at the headquarters of the Canadian Trucking Alliance-Ontario Trucking Association. The Regulations will require safety marks to be displayed on large trucks, rail cars and bulk containers used to transport dangerous goods such as pool chemicals and propane. Additionally, new safety marks will be used to identify organic peroxides, marine pollutants and other dangerous goods.
“One of the UN dangerous (goods mechanisms) they’ve incorporated is UN 1993. which could include more companies than intended,” said Saucier,
Transport Canada Protective Direction No. 31, released on October 17, 2013 and requiring classification testing and reporting on crude oil (UN 1267 and UN 1993) is for importers and distributors rather than trucking companies.
The Direction requires “any person engaged in importing or offering crude oil for transport to immediately test the classification of crude oil being imported, handled, offered for transport or transported as UN 1267, or UN 1993, if the classification testing has not been conducted since July 7, 2013, and to provide those test results to Transport Canada upon request.” The Direction also requires submission of a Safety Data Sheet for the shipment, with additional requirements for crude oil shipped by rail.
Saucier said Transport Canada’s concern was that shippers would use UN 1993 as way of not having an ERAP in place.
“CACD’s direction is to incorporate that number to existing plans and to get your ERAP up to date,” he said.
Protective Direction no. 34, meanwhile, addressed the identification of tank cars of CTC 111, DOT 111 or AAR 211 specification; with an April 23 deadline for getting these off the rails, cleaned, purged and marked with the words “Do not load with dangerous goods in Canada” or similar words to that effect.
This is creating a challenge, as there are thousands of these cars being used right now, Saucier noted.
“The capacity to upgrade those to meet the new standards is impossible. They cannot upgrade all the cars that are in people’s fleets and they can’t keep up with the demand for rail cars.”
New insurance requirements are also going to significantly impact the cost of moving dangerous goods, and the consumer will at the end of the day absorb the cost.
“Industry is working closely with Transport Canada to develop national emergency response capabilities, which is a positive thing. Consumable products used for firefighting will be staged across the country so fire departments will have the necessary tools and will be supported by industry through a network of technical supporters and advisers,” said Saucier.
TEAP III, (the Transportation Emergency Assistance Program), has been in place for many years and it’s in its third iteration, said Saucier.
TEAP III aims to maintain a national emergency response network capable of safely and efficiently mitigating the impacts of a chemical transportation incident anywhere in the country. It also provides a forum for transportation companies and emergency response service providers to share information and successful practices, and to encourage continuous improvement around chemical transportation emergency preparedness and response.
Through TEAP III, CIAC and its partner organizations have established two standards: the CIAC Transportation Emergency Response Standard, and the TEAP III Transportation Emergency Response Service Provider Standard.
The Liquefied Petroleum Gas Emergency Response Corp. has also indicated it will be providing Flammable Liquids ERAP services under a separate division of the LPGERC, as per Transport Canada Protective Direction 33 within the LPGERC.
“One of the problems Transport Canada has had is they are a little behind in amendments to the regulations. We are going to see an acceleration of the regulatory process but in the interim we may see more protective directions until the regulations can be passed,” Saucier said.
“I think we would agree with the protective directions issued so far. We don’t expect that to really slow things down. I think the concern right now is the uncertainty around rail tank cars. What does it mean in terms of retrofit? The railway supply industry is very constrained right now. It can take up to two years to get a tank car. In the meantime you’ve got people sitting on their hands right now waiting for what the new standard will be. It’s the same story in the US as well. I do think Transport Canada and the Ministers understand you can’t do something without alignment with the US,” said Cook.