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Montreal, Maine & Atlantic Files For Chapter 11

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Posted by Shrike Arghast on Thursday, August 22, 2013 4:06 PM

I believe that, no matter what, the MMA route will remain open. In that vein, I'm almost more curious to see how Trains itself responds to the disaster.

Just recently, we've seen a bevy of articles and opinion pieces extolling the virtues of shipping oil via rail, and the likely death throes of the Keystone XL project. The most recent one even mocked Canadian Prime Minister Stephen Harper for taking a hard line against oil-by-train. Trains has been both universally opposed to the pipeline and universally supportive of oil-by-rail. There's a kind of self-serving logic in that, so I was prepared to give them a pass...

... until what happened Lac-Megantic. Now, I'm not divine -- I don't know if that was a 'wake-up moment for a nation' or a 'turning point' or whatever. But it seems to me that just a month ago we were reading an article actively promoting how carrying oil by rail was far safer than via pipeline. In terms of simple numbers, that may still be true... but I can't remember the last time an American or Canadian oil pipeline blew up and killed 47 people completely uninvolved with either its operation or function, and decimated an entire downtown. Up until that point, a massive oil disaster on rails had been a 'what if' scenario, and the editing staff at trains were free to thumb their noses at the various scenarios. Now that one has played out, I'd hope the happy-go-lucky OIL ON RAILS IS EVERYTHING GRAND! coverage would cease.

In either this coming issue or the next, I'd like to see the magazine make some kind of a mea culpa, or, in the very least, attempt to balance what has hitherto been a one-sided 'debate' on the topic. Frankly, in the least, the worst Canadian train disaster in 139 years (I believe?) probably warrants a serious chunk of the content. I understand due to publishing delay that it hasn't been possible thus far, but I also expect it to be addressed at some point. This is BIG news, and Trains has been successively beating this 'oil-on-rails' drum for almost two years now. With 47-people dead, and an entire railroad bankrupted almost in an instant, it's time for the associated cheerleaders oil-on-rails to lower their caps, hang their heads, and perhaps offer a little introspective thought.

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Posted by jeffhergert on Thursday, August 22, 2013 11:50 AM

AVRNUT

I would not be at all surprised to see Irving Transportation take over the line. It would be the most logical choice. They already own New Brunswick & Southern Railroad, Maine Northern Railroad and Eastern Maine Railroad. They are currently leasing the old Bangor & Aroostook line that goes through Brownville Junction. They have a huge presence here in Maine including some sizeable timber acreage holdings, fuel storage depots, a branch office in Bangor, a couple hundred service stations, over a dozen full facility truck stops & probably much more. They have been one of MMA's major customers for oil & wood products transport. Seems to me it would be something they would be interested in, as the line from Lac Megantic connects up at Brownville with the old BAR line that Irving is already leasing from the State of Maine.

Carl

Railway Age is reporting that Irving's railroad subsidiary is negotiating with Maine about a possible acquisition of the MM&A.  The report said the subsidiary (I think without going back to look it was the NB&S) is also one of MM&A's creditors.

Jeff

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Posted by Ulrich on Thursday, August 22, 2013 7:42 AM

Shrike Arghast

The reason CP may want the line is because of the oil shales -- the reason the MMA train was hauling crude in the first place. This is a growing industry, and may soon begin to export. There has been some talk of reversing the flow of the pipeline running between Portland, ME and Montreal, but estimates run from 100-200 million to get the infrastructure in place. And, even then, the oil would be offloaded in Montreal just to be piped the last few hundred miles. I could all go by rail.

 

Portland is something like the 4th-busiest port on the east coast -- busier, even, than Boston by a good amount. Exporting the oil out of Maine could be huge business in the coming decades -- business that nobody saw coming when CP divested itself of the MMA's lines. The timing is right to take it back and profit.

 

But the line terminates in Saint John, NB, which is probably the smallest of the East Coast ports and a tricky proposition for shipping companies due to the Bay of Fundy tides. However, I too would like to see the line go back to CP. I like Irving too, but they are a private company; and on something like this (with an important safety and national interest angle) I would prefer a public company that would be required to provide full disclosure of its operations and financials. But if Irving took it over I'm sure it would be well run... I used to work for them and can vouch that they are very well run and very competitive.

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Posted by Shrike Arghast on Thursday, August 22, 2013 4:41 AM

The reason CP may want the line is because of the oil shales -- the reason the MMA train was hauling crude in the first place. This is a growing industry, and may soon begin to export. There has been some talk of reversing the flow of the pipeline running between Portland, ME and Montreal, but estimates run from 100-200 million to get the infrastructure in place. And, even then, the oil would be offloaded in Montreal just to be piped the last few hundred miles. I could all go by rail.

 

Portland is something like the 4th-busiest port on the east coast -- busier, even, than Boston by a good amount. Exporting the oil out of Maine could be huge business in the coming decades -- business that nobody saw coming when CP divested itself of the MMA's lines. The timing is right to take it back and profit.

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Posted by narig01 on Wednesday, August 21, 2013 2:05 AM
One last comment. The Nantes, Quebec Fire Department. I have not seen any mention of the Fire Dept (who shut the locomotive down) in the articles about law suits. Quebec governments may have sovereign immunity from lawsuits or Quebec's version.

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Posted by narig01 on Wednesday, August 21, 2013 2:01 AM

In the news : http://trn.trains.com/Railroad%20News/News%20Wire/2013/08/JD%20Irving%20eyes%20purchase%20of%20troubled%20MMA.aspx or http://www.cbc.ca/news/business/story/2013/08/19/business-mma-sale.html

In the CBC article the last paragraph is interesting. J.D.Irving has been listed as one of the defendants in the civil case for personal and property. I missed the article on the class action suit. http://www.cbc.ca/news/business/story/2013/07/18/business-lac-megantic-suit.html

I am not surprised that Irving is listed in the suit. Outside of CP they are the only other potential defendant with deep pockets. I do not see Irving as having a lot of liability as they would only be minimally involved before the wreck(unless they were involved in leasing the railcars).

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Posted by narig01 on Wednesday, August 21, 2013 1:40 AM
Opinion. About propane tanks. Lac-Megantic is a large enough town it probably has a gas distribution utility. In most communities with a gas utility tanks are not needed and in many cases prohibited.
I do not know this as a fact just conjecture.
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Posted by cx500 on Sunday, August 18, 2013 10:42 PM

blue streak 1

Does anyone have a detailed track diagram of the area including buildings especially on the outside of the curve ? ?

I think we will have to wait about a year for the TSB report, which almost certainly will have exactly that, among other things.  Meanwhile, be patient.

John

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Posted by MidlandMike on Sunday, August 18, 2013 8:07 PM

narig01

...
The only deep pockets I see with potential liability is the shipper and the broker World Fuels. It may be difficult to get World Fuels into a Canadian court as I do not see them having a lot of assets if any in Canada. Also brokerages tend not to have a lot of physical assets just a lot of offices and people. Oh yes and a lot of money.
For a claim against World Fuels to be successful against World Fuels, I would think that the plaintiffs would have to show the oil was mislabeled and misclassified. That this resulted in the cargo being placed in an inappropriate container (the DOT 111 tankcars) as opposed to a better vessel. And next that this resulted in the wreck turning from a wreck into an explosive fireball. Creating a situation where the affected persons did not have the time or opportunity to flee.
Legal disclaimer. Understand I AM NOT A LAWYER, THIS IS MY HUMBLE OPINION as an observer.

...

Rgds IGN

I'm not a lawyer either, but I have had much experience in environmental cases.  If World Oil didn't go to Canada to defend themselves, they would probably have to change their name to World Oil Except Canada.  While causation is always a key point in establishing liability, environmental law generally also holds the owner of the contaminant liable, especially if its beyond the capability of the initial responsible party to clean-up the spill.  Environmental law is written to insure a spill will get cleaned-up by liable parties before the public has to pay for it.

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Posted by blue streak 1 on Sunday, August 18, 2013 7:42 PM

Does anyone have a detailed track diagram of the area including buildings especially on the outside of the curve ? ?

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Posted by Norm48327 on Sunday, August 18, 2013 4:58 PM

Excellent question. Google Earth shows a couple of buildings within fifty feet or so of the track, and a picture I found shows tank cars in a position they could have impacted one of them during the derail. I was also wondering about a propane pig for a switch heater, but can't see one on Google Earth.

Norm


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Posted by BaltACD on Sunday, August 18, 2013 3:46 PM

One question that I haven't seen posed - was one or more of the buildings that the train derailed into using LPG, Propane or Natural Gas as a fuel source for heating/cooling/water heating or some other purpose and did that fuel source catch fire and thereby ignite the oil spill from the derailment? 

Any fuel containers (be they for gasses or liquid fuels) for any of the buildings would have been constructed to a even lighter standard that DOT 111 tank cars and even easier to have been ruptured in the events of the wreck.  Fuel sources of the building did not cause the incident, however, they may, repeat may have escalated the incident to the catastrophe it became.

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Posted by Pathfinder on Sunday, August 18, 2013 12:52 PM

rdamon

Sorry for the repost.

Not a problem, you link had a different perspective on the issue, at least for me.

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Posted by narig01 on Sunday, August 18, 2013 11:23 AM
This is the civil lawsuit for personal and property damage(not the cost of the environmental cleanup).

http://www.cbc.ca/news/canada/montreal/story/2013/08/16/quebec-lac-megantic-cprail-canadian-pacific-railway-class-action-cleanup-victims.html

Not unexpected CP is a target of this suit. CP's liability in this action is(in my opion)much more limited. I would think unless plaintiffs can show that CP had some control over MM&A operations it will be difficult to collect from CP.
The only deep pockets I see with potential liability is the shipper and the broker World Fuels. It may be difficult to get World Fuels into a Canadian court as I do not see them having a lot of assets if any in Canada. Also brokerages tend not to have a lot of physical assets just a lot of offices and people. Oh yes and a lot of money.
For a claim against World Fuels to be successful against World Fuels, I would think that the plaintiffs would have to show the oil was mislabeled and misclassified. That this resulted in the cargo being placed in an inappropriate container (the DOT 111 tankcars) as opposed to a better vessel. And next that this resulted in the wreck turning from a wreck into an explosive fireball. Creating a situation where the affected persons did not have the time or opportunity to flee.
Legal disclaimer. Understand I AM NOT A LAWYER, THIS IS MY HUMBLE OPINION as an observer.

Don't you love lawyers. As I said the lawyers have a lot of work. The ones who get paid by the hour are going to have a feeding frenzy.

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Posted by narig01 on Sunday, August 18, 2013 10:45 AM
Comment : It appears MM&A has purchased a new insurance policy.
This I would expect after their previous carrier denied a claim of the magnitude of this wreck.
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Posted by Anonymous on Sunday, August 18, 2013 7:23 AM

From the CBC:

Railway in Lac-Mégantic disaster may get operating extension in Canada:

http://www.cbc.ca/news/canada/montreal/story/2013/08/17/quebec-mma-transportation-agency-extends-railway-suspension-megantic.html

 

 

 

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Posted by rdamon on Friday, August 16, 2013 5:21 PM

Sorry for the repost.

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Posted by Pathfinder on Friday, August 16, 2013 3:34 PM

rdamon

Yup, as noted by Murray on Thursday above.  And CP will be fighting this, as noted above.

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Posted by rdamon on Friday, August 16, 2013 2:57 PM
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Posted by Pathfinder on Thursday, August 15, 2013 8:22 PM

MidlandMike

Murray

Thanks for the link.  There was an item in yesterdays NewsWire that spoke of high concentrations of aromatic hydrocarbons in the lake that Lac-Mégantic is named after.  There was an interesting quote from a Greenpeace supported environmental group concerning this in the Montreal Gazette article:

"SVP worked in collaboration with Greenpeace which provided funding for the study, SVP toxicologist Daniel Green said.

“We are very pleased that (Quebec) is finally making public some findings” and await the results of soil samples, Green said Wednesday.

While Quebec took surface water samples, SVP took samples from areas where oil had accumulated, he said.

“You have to sample smart,” Green said."

Taking samples specifically from ares of concentration is not sampling "smart", it is sampling bias.  There are environmental sampling protocols generally calling for either grid or random sampling, that will give representative samples.  Sampling a blob of oil floating on the water surface will obviously give you an analysis of almost pure oil, but it does not represent the millions of gallons of water that the oil is floating on.  Additionally, the free product floating on the water is required to be skimmed off and properly disposed of.  The sampling bias of the environmental group invalidates their study.

Being in the forestry business the "sampling" process used by the enviromental groups does not surprise me.  I have been involved in a few watershed studies looking at everything from sediment to temperature and you are bang on, there are protocols in place to make sure the samples are truly representative.  It is too bad that these kinds of groups, who could do so much good in the world, have to get cheap publicity on a tragic event like this.

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Posted by MidlandMike on Thursday, August 15, 2013 6:36 PM

Murray

Thanks for the link.  There was an item in yesterdays NewsWire that spoke of high concentrations of aromatic hydrocarbons in the lake that Lac-Mégantic is named after.  There was an interesting quote from a Greenpeace supported environmental group concerning this in the Montreal Gazette article:

"SVP worked in collaboration with Greenpeace which provided funding for the study, SVP toxicologist Daniel Green said.

“We are very pleased that (Quebec) is finally making public some findings” and await the results of soil samples, Green said Wednesday.

While Quebec took surface water samples, SVP took samples from areas where oil had accumulated, he said.

“You have to sample smart,” Green said."

Taking samples specifically from ares of concentration is not sampling "smart", it is sampling bias.  There are environmental sampling protocols generally calling for either grid or random sampling, that will give representative samples.  Sampling a blob of oil floating on the water surface will obviously give you an analysis of almost pure oil, but it does not represent the millions of gallons of water that the oil is floating on.  Additionally, the free product floating on the water is required to be skimmed off and properly disposed of.  The sampling bias of the environmental group invalidates their study.

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Posted by BaltACD on Thursday, August 15, 2013 4:09 PM

Pathfinder

As expected, CP will be challenging the order in court:

http://www.cbc.ca/news/canada/montreal/story/2013/08/15/lac-megantic-quebec-disaster-cp-rail-order-cleanup.html

Quebec law is very different than the rest of Canada, however I believe that CP is almost totally immune to provincial laws as they operate under federal jurisdiction.  This will be an interesting one to watch and see what happens.

Legal battles from this incident will still be in the court system in 2023 and maybe 2033.

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Posted by csxns on Thursday, August 15, 2013 3:12 PM

Ulrich

They're really going after most everyone... Why not also go after General Electric, the manufacturer of the tank cars that jumped the track, the manufacturer of the track, the ties, the signals, what about suing the weather service too? Sue the engineer and his parents.. (they didn't raise him properly), and of course McDonalds where no doubt he had eaten at some time in the recent past. And of course, what about suing the town of Megantic? Had the town been over about half a mile no one would have been hurt,  let alone killed..Obama.. get yourself a good lawyer, this is your fault too.  

Well said.

Russell

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Posted by Pathfinder on Thursday, August 15, 2013 1:11 PM

As expected, CP will be challenging the order in court:

http://www.cbc.ca/news/canada/montreal/story/2013/08/15/lac-megantic-quebec-disaster-cp-rail-order-cleanup.html

Quebec law is very different than the rest of Canada, however I believe that CP is almost totally immune to provincial laws as they operate under federal jurisdiction.  This will be an interesting one to watch and see what happens.

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Posted by Ulrich on Thursday, August 15, 2013 1:04 PM

They're really going after most everyone... Why not also go after General Electric, the manufacturer of the tank cars that jumped the track, the manufacturer of the track, the ties, the signals, what about suing the weather service too? Sue the engineer and his parents.. (they didn't raise him properly), and of course McDonalds where no doubt he had eaten at some time in the recent past. And of course, what about suing the town of Megantic? Had the town been over about half a mile no one would have been hurt,  let alone killed..Obama.. get yourself a good lawyer, this is your fault too.  

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Posted by narig01 on Thursday, August 15, 2013 12:47 PM
In the above articles.
CP is now being asked to pay at least part of the cleanup by the province of Quebec. In addition World Fuels the owner of record of the shipment has also been sent the same notice.
CP liability extends to the fact that the cargo was traveling on a CP bill of lading. The train was traveling on MM&A on a haulage agreement.
On World Fuels, from what I read I get the impression that World Fuels is going to vigorously attempt to fend off the claim.

The lawyers are going to have lots and lots of business.
Rgds IGN
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Posted by narig01 on Thursday, August 15, 2013 12:31 PM
In today's news :

http://trn.trains.com/Mobile.aspx?view=Article&id={A2EEB21C-B582-4BF4-9BEB-B9D7E8E2E524}

http://www.ctvnews.ca/mobile/canada/quebec-wants-cp-railway-to-help-pay-for-lac-megantic-cleanup-1.1411159

Rgds IGN
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Posted by Anonymous on Thursday, August 15, 2013 12:27 PM
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Posted by Deggesty on Thursday, August 15, 2013 12:17 PM

Mention has been made of the possibility that the CP would take the line back. Why did the CP get rid of the line? Has the situation changed to the point that the CP would believe it to be advantageous to regain the line?

Johnny

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