Big Oil must pay Big Rail for Big Mess

A long standing disagreement between Imperial Oil and CN Rail has finally worked its way through the judicial system, with Imperial Oil ending up having to write a check to pay for the clean up of the old tank farm area along George Hills Way.

The issue which goes back many years into the past century came to an end last week as the Hon. Justice Bryan Findlay Ralph made judgment in favour of the Railroad ordering Imperial Oil to pay $724,000 for soil contamination on a portion of the site along George Hills Way. The bill could have been higher, but the Court decided that Imperial Oil was not responsible for a clean up of the whole site, bouncing that back into the boardrooms of Canadian National.

The Daily News featured details of the long running saga in Tuesday’s paper.

Oil firm told to pay clean-up costs
Contamination of site on George Hills Way ruled on in B. C. Supreme Court
By Leanne Ritchie
The Daily News
Tuesday, October 30, 2007
Pages one and five

The B.C. Supreme Court has ordered Imperial Oil to pay CN Rail almost three quarters of a million dollars for environmental damage done to property in Prince Rupert.

In a ruling handed down last week, the Hon. Justice Bryan Findlay Ralph ordered Imperial Oil to pay $724,000 for soil contamination on part an old fuel tank site along George Hills Way.
For much of the last century, the land was leased from CN to Imperial Oil.

According to James Kay, a civil engineer who was called as a witness for CN, there is fuel and metals present in the soil, specifically arsenic, that exceed the criteria for commercial land use.
"The potential sources of arsenic include the oil itself, sandblasting operations, sand bedding for the tanks, residue from the tank bottoms, residue from the boiler house, and from operations such as tank maintenance, construction and demolition," Kay told the court.

Heavy metals also may have been transported to the site in fill brought in by Imperial Oil, he said.

While Imperial Oil admitted its activities caused the hydrocarbon contamination at the property, it denied responsibility for the presence of heavy metals.

The court ruled Imperial Oil has to pay for the clean-up of those areas of land where substantial soil testing has been done, about 2,350 square metres of land.

CN had asked for a settlement to cover the entire area where Imperial Oil conducted activities, 6,000 square metres. That may have cost as much as $3.1 million.

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However, the court ruled there was not enough evidence to force Imperial Oil to pay for a clean-up of the whole site.

The cost of testing this area to produce evidence was estimated to be in the range of $400,000, and according to the court, CN was reluctant to undertake such testing.

It is unknown whether CN will appeal the ruling or pursue further remediation costs, under the Environmental Management Act. It is also unknown if CN has begun to remediate any areas of the site or what it plans to do with the property in the future.

“We have received the decision and we are reviewing it, said Kelli Svendson, CN Rail spokesperson.

The case goes far back into Prince Rupert’s history – Imperial Oil first leased the property from the railway company’s predecessor, the Grand Pacific Railway Company, on Aug. 1, 1914, in order to distribute oil.

Imperial Oil constructed at least 16 above ground storage tanks (AGSTs) to hold petroleum products on the site. There was also a boiler house, a pump area, and product transfer piping that ran to a location on the waterfront. It appears that during the Second World War, the company moved a number of storage tanks off a bluff onto areas on the site that had been partially blasted out of the rock cliffs in the southern portion of the property. In 1993, Imperial Oil decommissioned its operations on the site and the storage tanks and other structures were removed from the property. Imperial Oil did not, however, seek to terminate its lease until Aug. 27, 2002.