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Protests and train derailments punch Canada’s oil patch where it hurts

The protests in support of the Wet'suwet'en have crossed the country.

PortandTerminal.com, February 12, 2020

OTTAWA, CANADA – Canada’s complicated relationship with oil got a whole lot more complicated over the past two weeks.

Canadian oil shipments are getting snarled once again as protesters block train lines in the latest setback to the nation’s rail-dependent crude industry that was also struck by a blazing derailment just last week.

READ: Simplified: Canada’s complicated relationship with oil

Let’s break down both the protests and the derailment.

Protests by the Wet’suwet’en Nation

The Wetʼsuwetʼen are a First Nations people who live in British Columbia on Canada’s west coast. They oppose the construction of a gas pipeline through their traditional territory in northern British Columbia. The $US 5 -billion, 400-mile pipeline is intended to carry gas from northeastern B.C. to a massive LNG export plant being built near Kitimat. The nation’s hereditary chiefs have repeatedly said they do not want a pipeline.

Map of Northern British Columbia showing the proposed route of a pipeline project through Wet-suwet'en territory

Canada has an appalling track record of mistreating its First Nations people and any attempt to steamroll a project through their native lands was sure to meet heavy resistance. Many Canadians are rightly ashamed of the country over the treatment of the Wet’suwet’en and have joined in protests and rail blockages across Canada to show their support.

Protestors in support of the Wet’suwet’en Nation have blocked rail lines and other transportation hubs across the country.

These rail blockades cut off crude-by-rail shipments on the CN network to three Eastern refineries that account for about a third of the country’s refining capacity.

Even the Port of Halifax on the East Coast of Canada has not been spared. More than 140 protesters blocked access to the Ceres container terminal in Halifax on Tuesday afternoon.

Train derailments

Dozens of crude tanker cars derailed and caught fire in Saskatchewan last week.

The turmoil caused by the protests comes just about a week after Canadian trains carrying oil were ordered to cut their speed for a month after dozens of crude tanker cars derailed and caught fire in Saskatchewan, the second such derailment on the same stretch of track since December. In this latest derailment, an estimated 320,000 gallons of crude oil was spilt.

What does this mean to Canada?

Canada relies on rail to move oil and gas from the west where most of it is produced to the east, where most people live. When you block the rail lines you shut down the country.

Slowdowns and obstructed train traffic highlight a vulnerability for Canada’s oil patch. Crude producers have grown increasingly reliant on rail to get their supplies to market after pipelines out of Alberta filled to capacity two years ago.

The disruptions may get worse as the halt could cascade into slowdowns in other areas of the network as traffic backs up and locomotives and rail cars face congestion, according to CN.

Meanwhile, the protests in support of the Wet’suwet’en pick up steam with protests yesterday in the nation’s capital Ottawa. And it isn’t just the oil patch that is feeling the effects. The Alberta wheat and barley commissions said rail disruptions of just a few days will cause economic loss for farmers, who have faced difficult harvest conditions.

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