Thursday, December 20, 2012

CN's Mystery Train

CN 7068 in Saint John

This is a bizarre story.

In early December, the CBC reported on a "mystery train" running biodiesel between Sarnia, Ontario and Port Huron, Michigan in June 2010. Apparently the same tank cars were shuttled back and forth without ever unloading them. CN reportedly stood to make $2.6 million moving these cars on CN 503 to Port Huron and CN 504 returning to Sarnia.

The Canadian shipper was apparently Bioversel Inc., whose website has gone dark... however has a copy (it's hard to really delete stuff on the Internet!). The US side apparently involved at least two companies, HeroBX and Northern Biodiesel.

That was all very interesting. At the time I figured there must have been some tax credits involved. I was "on the right track" but not quite correct.

It turns out that biofuel credits were involved, according to the CBC. The article explains that Bioversel stood to gain somewhere between $6 million and $12 million dollars in renewable fuel credits for the 12 train loads of biodiesel that were "imported" into the USA. You should read the article to get the details - it's a bit complicated. According to the article, the loads were sold to US companies as biodiesel, then sold back to Bioversel as ethanol and shipped back again.

CN's role in this was to ship the cars back and forth. According to the article, there are reports from CN employees that they were concerned about the shipments but were told by managers in Sarnia that this was lucrative for the company. The aim was to get as many "flips" as possible in the month, according to this memo. It spells it right out.

CN has vowed cooperation in a probe by the Canadian Border Services Agency and the US Environmental Protection Agency.

I'm sure there will be more to come!


Eric said...

Thanks for posting the link to the memo. Fascinating internal CN stuff, and I'm guessing someone is going to be looking for a new job.

Reminds me of the two preserved CP units that bounced through Alta and BC before finding their proper home in Nelson.


CanRailfan said...

The memo seems to have "mysteriously" disappeared? (Sun Jan 26/14)

CanRailfan said...

Where is the memo??? it seems to have "mysteriously" disappeard? (Sun Jan 26/14)

Steve Boyko said...

Good question, I see it is not linked from the CBC article any more.