CP Rail says 400 barrels of oil spilled in Ontario, not four

By Scott Haggett and Allison Martell

(Reuters) - Canadian Pacific Railway Ltd raised its estimate of the amount of oil spilled in a derailment in northern Ontario a hundred-fold on Thursday, and said 400 barrels (16,800 gallons) had leaked from two tanker cars, up from its initial estimate of four barrels.

CP Rail spokesman Ed Greenberg said the size of Wednesday's spill, the company's second in a week, was not evident when crews first arrived at the remote site of the derailment near White River, Ontario, about 700 kilometers (400 miles) northeast of Toronto.

"During the clean-up yesterday our crews discovered the second derailed car containing oil had in fact lost product," Greenberg said. "The second car was difficult to assess due to its position among the derailed equipment but showed no signs of the product around its base during the initial assessments."

A boom in North American oil production has prompted a huge rise in crude-by-rail transport as output has outgrown the existing pipeline network. CP's spills over the past week have highlighted concerns about the environmental impact of rail shipments.

"I think rail is now going to face the same kind of scrutiny that pipelines have come under," said Keith Stewart, a spokesman for Greenpeace Canada. "Rail used to be pretty inconsequential in terms of moving oil, but we've seen rapid growth in the last three years and they're projecting massive growth. I think the industry has rose-colored glasses on if they think that they can ramp up moving oil by rail, the way they're talking about, without running into big opposition."

The new estimate puts the size of the northern Ontario spill above that of last week's CP derailment in Minnesota, where about 15,000 gallons, or 360 barrels, leaked from three tank cars.

But the two leaks are far smaller than last week's pipeline breach in Mayflower, Arkansas, in which an aging Exxon Mobil Corp pipeline broke and sent up to 5,000 barrels flooding through suburban streets.

The Ontario derailment came early on Wednesday, when 20 cars on an eastbound, mixed-freight train bound for Montreal left the tracks. CP, Canada's second largest railroad, said it was still investigating the cause of the accident, but that it expected the track to re-open later on Thursday.

Greenberg said the spill has been contained and no oil has been found beyond its containment berms.

CP shares fell 84 Canadian cents to C$121.67 on Thursday on the Toronto Stock Exchange.

($1=$1.01 Canadian)

(Reporting by Allison Martell and Scott Haggett; Editing by Janet Guttsman; and Peter Galloway)

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