Crude Oil Shipper Settles in Lac-Megantic Rail Disaster
MIAMI, June 9 (UPI) — A company tied to the sale of the oil on the train that crashed in Lac-Megantic, Quebec, in 2013 said it agreed to contribute to a settlement for victims.
World Fuel Services Corp. said it agreed to contribute about $90 million to a compensation fund for victims of the 2013 derailment as part of a settlement with the Montreal, Maine and Atlantic Railway and its bankruptcy trustees.
“We believe that participating in the settlement and contributing to the compensation fund is in the best interests of our shareholders and will also aid in providing closure to those affected by this tragic accident,” the company’s chairman and chief executive officer, Michael Kasbar, said in a statement.
A World Fuel subsidiary sold the crude oil that was on the train at the time of the incident. More than 40 people were killed in Lac-Megantic after the derailment of a train carrying tankers of crude oil from North Dakota to Canadian refineries.
U.S. regulators in early 2013 started an operation dubbed Bakken Blitz to examine how shippers are classifying crude oils that may be more prone to detonate in some types of rail tankers. Supporters of the energy industry said they had questions about the concerns raised over Bakken oil, a grade found in North Dakota.
North American crude oil production has increased to the point that it’s more than the existing pipeline infrastructure can handle, leaving energy companies to rely more on rail for transport. More rail disasters involving crude oil have occurred in recent years as a result.
In March, the Transportation Safety Board of Canada dispatched investigators to the site of a derailment of a train carrying crude oil through the village of Gogama in Ontario. The derailment was the second in the region in less than a month.
Montreal, Maine and Atlantic Railway blamed the air brakes on the locomotive holding the freight for the Lac-Megantic incident and later filed for bankruptcy protection.