Canadian National crude, products deliveries to Vancouver disrupted by fires

Ongoing wildfires in British Columbia have disrupted Canadian National Railway's crude oil and petroleum products shipments to the greater Vancouver area, with delivery backlogs expected to last at least another couple of weeks.

While Canadian National's crude oil and petroleum volumes have increased in recent months as North America has emerged more from the ongoing coronavirus pandemic, a sudden spate of wildfires in British Columbia have slowed the progress, including the outage of a crucial bridge near Lytton.

While CN recently restored access to the bridge after a two-week outage, there is a lengthy backlog of deliveries that will take time to work through, CEO JJ Ruest said July 20 during an earnings call.

Although service is back online, wildfires continue to rage throughout much of the region during particularly dry conditions.

"It's a very active situation in British Columbia with the fires," he said. "There are a lot of starts and stops."

And, even with service ongoing again, railways are required to slow the speeds of their rail cars in fire danger zones, further slowing deliveries.

Despite the recent issues, CN reported about $540 million in petroleum and chemicals revenues, up 17% from the same quarter last year during the early months of pandemic lockdowns. Although revenues were only up slightly from the first quarter of 2021, CN specifically noted that increased volumes of crude oil and NGLs.

CN cited rising frac sand volumes as a primary driver for growth in its metals and minerals division.

CN also noted "improving expectations for refined petroleum products as travel patterns resume."