Imperial Oil 'will cover fuel costs' after rail bridge burns

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The territorial government says Imperial Oil has agreed to cover the additional costs of transporting fuel to some northern communities by truck, not rail, after a CN Rail bridge was destroyed by a wildfire.

The rail company's bridge at Steen River burned in the fire which closed the highway between the NWT and Alberta in late May.

Ordinarily, fuel destined for 16 communities served by the NWT government – which provides bulk delivery where the private sector does not – is taken to Hay River by rail and then transported by barge.

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With the rail line out of action indefinitely, that fuel will have to arrive by road instead.

"Imperial Oil has stepped up to the plate on this," said Wally Schumann, the territory's infrastructure minister, in the legislature on Thursday.

"They have told us that they will pay the extra costs for transporting the fuel," said Schumann. "They will also move the fuel by truck and will manage the transportation. The Government of the Northwest Territories will only be paying for the original rail rates.

"There is no impact on the price of fuel in the communities that are served by the Government of the Northwest Territories through the Petroleum Products Program. We owe a thanks of gratitude to Imperial Oil for stepping up to the plate for the residents."

At the time of the bridge fire, Jonathan Abecassis – a spokesperson for CN – was not able to provide many details. He said the company would "get to the bridge soon as everything is more under control," but could not speculate as to how long repairs would take.

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On Thursday, Schumann said repair work "is being performed."

Imperial Oil was implicated in last year's NWT barge fiasco, in which resupply shipments were unable to reach several communities before winter ice set in.

A massive Imperial shipment of fuel had to be barged back from Norman Wells after it was discovered the fuel "wasn't to spec," causing delays to later deliveries and ultimately resulting in the NWT paying for additional resupply flights once the barges could not get through.

Imperial Oil on Thursday told the CBC it does not comment on agreements with customers, including the territorial government.

The Steen River bridge lies on the only rail link between the Northwest Territories and the rest of Canada, leading to the railhead at Hay River.

In a statement in late May, CN said it was "currently looking at different options to maintain certain deliveries to communities." Abecassis did not share any of these options, only saying: "It's too early to speculate at this point."

Imperial Oil's agreement with the territorial government does not apply to communities such as Hay River itself or Yellowknife, which are served by the private sector and not the government bulk fuel program.

Sarah Pruys contributed reporting.