FDL and the Capitalist Train Wreck

The Lac-Mégantic Tragedy and American Capitalism

By: Knut Tuesday July 9, 2013 2:03 pm

The beautiful town of Lac-Mégantic – before the disaster

The appropriate subtitle is ‘Bhopal Coming to Your Hometown Soon.’

The train wreck (this time literal as well as figurative) at Lac-Mégantic hasn’t got much play here, but it is important enough to deserve attention, as it perfectly illustrates the principle of regulatory capture, like the non-incendiary financial meltdown in 2008. Here’s the story.

In 2003 the Canadian Pacific Railway sold off the portion of its line that runs east of Montreal through northern Maine to Portland to a private company headquartered in Chicago known as the Montreal, Maine and Atlantic Railway. The enterprise (like all well-run American enterprises headed by MBA types) was almost completely levered, which meant after paying interest, bribes and executive salaries didn’t have much left over to maintain the tracks. I can testify to this, as the tracks run close to our country house, and we sometimes walk on them. The wood is rotten, the rails in bad shape, and there is grass where there should be gravel in the road bed. They also use inferior equipment. In the particular case in question, they used tank cars for explosive material (it could just as well been something toxic like sulphuric acid) that are no longer permitted because the walls are not at least one inch thick. But they got a variance which allowed the company to ship oil in them until they were replaced, which in the case of this company would have been never. Not surprisingly, when the train derailed in the middle of a small town (which could have been Montreal or Portland, Maine for that matter), they exploded.

The train, composed of 70 tank cars and five engines to draw them, had only one engineer. This is also a variance, which they got from the Canadian regulatory agency last year. I’d like you to imagine a heavily loaded train carrying explosive or toxic materials going through your town with only one person to make sure it gets through safely. At Nantes, QC, the engineer got off the train to take a nap. He would be replaced by an American crew (of one!) to take the train through Maine. The locomotive motors were left running to maintain pressure in the air brake system. While he was napping one of the engines caught on fire. A local noticed, and called the fire department, which put the fire out. The breaks having failed, the train moved out of the station on a grade that fell some 350 feet in 12 kilometers. By the time it reached the town it was going close to 50 miles an hour into a curve that it had to take at 5 miles. The rest is history. It is hardly worth mentioning that the Company President blamed the Nantes fire department.

The whole episode seems to me to sum up what has become of American capitalism. Over-leveraged, shoddy product and performance, milking the enterprise of its capital, and capturing regulators to get away with it. It is the banking disaster writ small. In the mean time the investigators have found only 5 bodies of the 60 to 80 that were incinerated in the center of town when the train exploded.

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One response to “FDL and the Capitalist Train Wreck

  1. Just a note: I was a former employee of an American RR company employed as a locomotive engineer. There is more to the story than you report. Locomotives are reliant on a constant air supply for proper operation. The train air brakes however operate on an auxiliary air system that makes them operate when air pressure is reduced. There are some circumstances when air brakes on a train can be released if the air supply on the train is “bottled”, preventing air to be introduced into the brake pipe. If there is leakage or a kinetic wave present in the brake pipe it may cause the ABD valve on individual car to sense a large enough variation in Brake Pipe pressure to “trigger” an undesired increase in BP pressure supplied by the auxiliary reservoirs causing a propagation to other cars resulting in a undesired release. If the fireman while fighting the blaze inadvertently closed a brake pipe valve thinking it the right thing to do may have created the right condition for this to occur. I am not blaming any one but the scenario you suggest as the only possibility is highly unlikely

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