North

Downed rail line will not cause higher fuel prices in N.W.T., minister says

The added expense of trucking fuel north from Edmonton for the annual barge resupply won’t be passed on to customers, says the Minister of Infrastructure. Wally Schumann says Imperial Oil has agreed to cover the added expense, caused by a wildfire that destoryed a rail bridge.

Minister says Imperial Oil has agreed to absorb the higher cost of trucking fuel north

Fuel resupply for many N.W.T. communities is barged from Hay River after normally being delivered by rail from Alberta. (NTCL)

The added expense of trucking fuel north from Edmonton for the annual barge resupply won't be passed along to customers, according to the N.W.T. Minister of Infrastructure.

In the legislature on Thursday, Wally Schumann was questioned about how trucking fuel north to Hay River rather than shipping it by rail was going to affect prices consumers pay in communities along the Mackenzie River and further north.

"Imperial Oil has stepped up to the plate on this," said Schumann. "They have told us they will pay the extra cost for transporting the fuel.

"The Government of the Northwest Territories will only be paying the original rail rates. There is no impact on the price of fuel in the communities. So, we owe a debt of gratitude to Imperial for stepping up to the plate for the residents."

Infrastructure minister Wally Schumann says the higher costs of shipping fuel to Hay River this year will not be passed on to customers. (Hilary Bird/CBC)

Last month a wildfire in Alberta burned a bridge along the rail line at the Steen River. The line, which runs from Edmonton to Hay River is out of service until the bridge can be rebuilt.

A spokesperson for Imperial said the company does not speak publicly about agreements with its customers.

"We are working with our customers to manage those additional costs," said John Harding.

"We're doing everything we can to make sure there's no delay with the barge season."

Last month, Schumann said cancelled barge shipments to three communities last year were partly due to a shipment of bad fuel from Imperial. Schumann said the 1.14 million litre shipment was barged halfway down the Mackenzie River, to Norman Wells, before anyone realized it was bad.

It then had to be barged back to Hay River, pumped back into rail cars, and returned to Edmonton.

At the end of that season, shipments of goods and fuel to Paulatuk, Kugluktuk and Cambridge Bay were cancelled, as well as a shipment of gasoline for Sachs Harbour. Taxpayers ended up having to pay millions of dollars to airlift some of the essential fuel and goods into the communities.

The barge cancellations were also partly due to high water levels at the beginning of the season and bad ice conditions at the end. Schumann earlier stated the government has negotiated a $54 million sole-sourced contract with Imperial for fuel for three years.

Comments

To encourage thoughtful and respectful conversations, first and last names will appear with each submission to CBC/Radio-Canada's online communities (except in children and youth-oriented communities). Pseudonyms will no longer be permitted.

By submitting a comment, you accept that CBC has the right to reproduce and publish that comment in whole or in part, in any manner CBC chooses. Please note that CBC does not endorse the opinions expressed in comments. Comments on this story are moderated according to our Submission Guidelines. Comments are welcome while open. We reserve the right to close comments at any time.

Become a CBC Member

Join the conversation  Create account

Already have an account?

now