Oil Companies Set Up $345 Million Fund For Lac-Mégantic Victims

A group of oil firms have agreed to establish a $345 million fund for victims of a 2013 oil train wreck in Quebec that killed 47 people and destroyed dozens of buildings.

A group including Royal Dutch Shell, Marathon Oil, ConocoPhillips, Irving Oil and others are all pitching into the fund, the Wall Street Journal said.

If the fund is approved by U.S. and Canadian courts the companies will be shielded from wrongful death and negligence lawsuits related to the accident.

The Transportation Safety Board of Canada, an independent federal agency, said in August that the Canadian government did not properly audit the railroad company responsible for the disaster.

The accident happened on the night of July 6, 2013, after an engineer parked tankers loaded with Bakken crude on a mainline near Lac-Mégantic, Quebec.

The train’s brake system failed, sending the train downhill where it eventually derailed and exploded.

About 30 buildings in Lac-Mégantic’s downtown area were either damaged or destroyed in the accident.

The tanker’s operator, Quebec-based Montreal, Maine and Atlantic Railway Ltd, is now insolvent.

The firms have maintained that they are not at fault for the accident and that all crude on board the train was properly labeled.

A Marathon Oil spokesperson told the Journal that participation in the fund is not an admission of liability and that the contributions were made to avoid “the time and expense associated with protracted litigation.”

Houston-based Marathon added that it doesn’t believe it “mislabeled, misclassified or otherwise misled others regarding the characteristics of the crude oil.”