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OmniTrax backs away from controversial plan to ship crude oil through Hudson Bay

WINNIPEG - A rail company is putting the brakes on a controversial plan to haul millions of litres of crude oil across its northern rail line to the port of Churchill on Hudson Bay.

Omnitrax Canada president Merv Tweed said the company, which operates the port in Manitoba, is expecting another record shipping season from grain and other commodities. That has shifted the company's focus away from shipping crude oil, he said.

"We've got a glut of grain on the market," Tweed said Friday. "It looks like another great crop. We increased our volume last year. Our targets are higher this year and they'll be higher again next year. I think it's important that we focus on the grain side of it. That's the direction that we've chosen."

Omnitrax had argued the plan to transport oil across hundreds of kilometres of remote rail line built on permafrost was safe and would help create much-needed jobs in the North. But the proposal was vehemently opposed by aboriginal groups, environmentalists and the government of Manitoba.

Community consultations were "important factors" in the company's decision to back away from the plan, Tweed said.

"We listened to them. I share some of their concerns," he said. "I'm not saying we can't do it. I'm just saying right now, as the president of a company that's looking to grow, we need to focus on the grain market."

The northern rail line has been plagued by derailments that have intermittently forced the suspension of both freight and passenger services. That bolstered the argument among detractors that shipping oil along the rail line was too risky to the environment and the safety of those who live in the region.

The most recent figures from the Transportation Safety Board of Canada show there were 63 accidents on the Hudson Bay rail line between 2003 and 2012. All but 10 were derailments.

Eric Reder with the Manitoba Wilderness Committee said Omnitrax has made the right decision. The rail line is bent and crooked because of the challenging terrain it covers, he said.

"Trying to keep this train track straight is an incredible undertaking," Reder said. "It's hard to imagine that there could be a worse track to ship crude oil on."

The plan meant those living near the rail line would assume a huge risk with little benefit, he said. Cleaning up a derailed grain car is one thing but cleaning up a crude oil spill is quite another, Reder suggested.

"When there is a grain spill, the grain is on the ground, but it doesn't leave a mess and it doesn't stay there for generations."

While Tweed said Omnitrax will look at other ways to diversify its shipments by possibly including potash and wood pellets, Reder said legislation banning the shipment of oil through northern Manitoba is the only way to guarantee the plan doesn't get resurrected.

Transportation Minister Steve Ashton had said Manitoba couldn't support the plan in light of the deadly derailment in Lac Megantic last year. Any spill would jeopardize the livelihoods of aboriginal communities, pose a huge risk to wildlife and threaten tourism in Churchill, he said last year.

Churchill, known as the "polar bear capital of the world," is an eco-tourism destination for polar bear, beluga whale and bird watching. Ashton was not available Friday to comment on Omnitrax's decision.

"We have opposed shipping oil through the port of Churchill for environmental and rail safety reasons," said Jodee Mason, a cabinet spokeswoman. "We believe that Omnitrax is making the correct decision by suspending their efforts to ship oil."

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