Kelso Technologies Shares Rally as Products Named Best Available Safety Technologies

Andrew Klips |

Two train derailments in Wisconsin this month have people again questioning the safety of trains. On Sunday, a Canadian Pacific Railway (CP) (CP:CA) train hauling crude oil, had 13 of its 110 cars skip the tracks in Watertown, about 40 miles northeast of Madison, spilling a reported 300 to 500 gallons of crude as one of the tankers was punctured. Only a day earlier, a train owned by Burlington Northern Santa Fe, a subsidiary of Berkshire Hathaway (BRK.B), had 25 cars derail about two miles north of Alma, spilling a reported 20,000 gallons of ethanol into the Mississippi River. Fact is, train derailments are relatively common, including more than 1,200 in 2014, but most are harmless with the only damage caused to cargo on board. However, derailments like these that spill hazardous material or others, such as the Lac-Megantic rail disaster in Quebec that killed 47, destroyed buildings and spilled about six million liters of crude oil in 2013, certainly heighten what can happen.

Kelso Technologies Inc. (KIQ) (KLS:CA) is an innovator in the railway equipment supply industry in North America, leveraging their patented technologies to design and sell service equipment for moving HAZMAT safely via rail tank car. The Vancouver-based company makes the Kelso Klincher, a one-bolt manway, and a pressure relief valve (PRV) for tankers. The Klincher replaces the legacy style of a series of eye bolts around a manway and uses technology that’s superior to older products still used today. Kelso touts its products reduce the number of non-accidental releases (NARs), increase employee efficiency and safety and lower operating costs through a 30 percent reduction in loading time and extended gasket life. The dual-rated PRV is designed to continuously release pressure to prevent an explosion in a fire situation.

The use of eye-bolt manways plays a role in rail car leaks, albeit an accident scenario or not. Eye-bolt manways are responsible for more than 40 percent of all non-accident leaks and are known to sheer off or come loose in accidents. Kelso’s Klincher reduces these risks. Also in Kelso’s product portfolio is a bottom outlet valve with a patented handle that prevents the unit from opening, as has been seen in several recent accidents.

When it comes to emergency responders, they often get all too frequent on the job training with respect to fires and auto accidents, but these brave people also play a key role immediately following a train derailment, something they historically would not have a great deal of practice at. That’s a fact that the Firefighters Education and Training Foundation's (FETF) “Safety Train” Program is correcting. John O’Neill is the founder of the not-for-profit FETF and a board member at Kelso Technologies.

The FETF, whose sponsors include chemical giant Dow Chemicals Co. (DOW), Dana Corp. (DAN), Norfolk Southern (NSC) Conrail, Amtrak and more, is dedicated to providing the necessary equipment and training programs to teach emergency responders, railroad personal and government officials on how to deal with railroad emergencies. The organization has grown its training tools from the first Safety Train, including a classroom car, three different types of tank cars and a Dome car, to more than forty cars designed for training. In collaboration with CSX Transportation (CSX), FETF even developed the world’s only SWAT train to educate police officers on railway security incidents.

On Thursday, Kelso said that its Kelso Klincher and PRV are now being featured by the FETF Safety Train Program as Best Available Safety Technologies (BAST).

Explaining the new designation, John O’Neil commented on behalf of the FETF, "We are always striving to improve our training programs by including the newest technologies available. The Kelso Klincher Manway and pressure relief valve bring innovative ideas to the industry that will better protect the emergency responders, the community and the environment. Both are an important part of our "hands-on" training program.”

James R. Bond, CEO of Kelso added, "Kelso is honored to have its products featured on the Safety Train program. It is an important education and awareness initiative that allows Kelso to showcase our innovative BAST equipment on the program's latest training rail cars for stakeholders to experience.”

Shareholders of Kelso are responding favorably to the news, perhaps as a sign of the company that Kelso could be keeping in the future with the exposure to all the large industry players involved with the FETF. After printing a new 52-week low on both the Toronto ($0.98) and US ($0.75) on Wednesday, the stock rallied by about 30 percent on both exchanges on Thursday and continues to roll ahead in Friday action, printing as high as $1.58 in Toronto and $1.19 in the States in morning trading.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
KIQ Kelso Technologies Inc 0.91 0.02 1.83 3,628
CSX CSX Corporation 36.48 -0.14 -0.38 15,058,018
DAN Dana Holding Corporation When-Issued 17.24 0.01 0.06 1,975,313
CP Canadian Pacific Railway Limited 151.16 -4.22 -2.72 654,400

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