Calm Air swoops in to avert fuel crisis in Churchill, Man.

Local airline Calm Air has flown in to avert a looming fuel crisis in Churchill.

Executives of Omnitrax Rail told CBC News on Friday the company was forced to cancel a shipment of gas scheduled for the northern town because the province of Manitoba would not certify the storage tanks it operates near the port.

The company sent a letter to the province saying the gas shipment was cancelled. Omnitrax estimated there was only enough fuel in storage to last until late Febuary.

Buta solution to the dilemma came quickly from airline company Calm Air. Company president Gary Bell saidhe got a call from the province Friday afternoon, desperate for a solution.

"We said look, don't panic, we're a stakeholder in the town, and we will make sure that the fuel gets there and if it means we have to take less jet fuel and fly a jet [with aviation fuel]there later, that's fine," Calm Air president Gary Bell told CBC News Friday afternoon.

Calm Air flies regularly scheduled flights into Churchill. The rail line to the community was damaged by a flood in May and remains unrepaired.

• Repairs to Churchill rail line will cost $43.5M: Consultant report

The aviation company, which is owned by Winnipeg-based Exchange Industrial Group, will use capacity in its own storage facility normally set aside for jet fuel to bunker gasoline for the town's use. It will replace the approximately 300,000 litres of aviation fuel it needs with multiple flights in a specially fitted airplane, if the rail line to Churchill isn't repaired by the spring.

"A combination of ourselves and the province will pick up the tab for that. The amount that the town will be on the hook for is they will get charged the regular margin for the fuel that we'll sell them, so there won't be any increase in price," Bell says.

Bell says it will cost roughly $250,000-$300,000to fly the aviation fuel up to Churchill.

Omnitrax says fuel hasn't left yet

There is a discrepency about whether the fuel is actually in transit or hasn't left for Churchill yet.

Omnitrax executives Peter Touesnard, the chief commercial officer, and Merv Tweed, the president, told CBC News on Friday the ship containing not only the gas, but diesel and aviation fuel as well, hadn't left for Churchill.

Touesnard says the cut-off for the decision on whether to approve the shipment of fuel was Friday and they would have to "cancel the order for gasoline because we have no place to put it."

However, Calm Air's Bell says the ship containing not only gasoline for the community but diesel and jet fuel his company had ordered was already at sea and on its way to the town.

Tank safety an issue for months

Omnitrax and the province's Sustainable Development department had been mired in a back-and-forth correspondence for months over the safety of what the company called "legacy tanks" in its storage facility.

"The early indication was this was the plan we were going to use because it made sense and suddenly it didn't and yet they [the existing fuel tanks]are being utilized as we speak," Tweed said.

Ultimately the province ordered Omnitrax to empty five of the tanks and take them out of service by Oct. 13.

The Omnitrax executives say they tried to get provincial approval to use the existing storage tanks. The company is in the process of installing new tanks at the facility.

"We made a proposal to the province where we would use a couple of legacy tanks that we had inspected by an engineer and approved; said there was no leakage and the integrity of the tanks were good," Tweed says.

CBC News obtained a letter from Manitoba Sustainable Development to Omnitrax from last June indicating the province was willing to extend permits for several tanks in the community until October, subject to certain conditions.

However, a further letter was sent by Manitoba's Sustainable Development to Omnitrax on Oct. 6 ordering the company to empty six of its older tanks and take them out of service.

The arrival of a saviour in the form of Calm Air prompted Omnitrax to respond. The company sent a statement to CBC News late Friday.

We're pleased that a resolution has been found, ... We are disappointed that we were not included in the discussions that facilitated that solution.- Omnitrax presidentMervTweed

"We're pleased that a resolution has been found, because our priority has always been to arrive at a solution that benefits the people of Churchill and addresses the challenges they are facing for the winter ahead. We are disappointed that we were not included in the discussions that facilitated that solution," wrote Merv Tweed.

Churchill mayor Mike Spence and the town's council wrote a message to the community on Friday reassuring residents the fuel problem had been averted and took a swipe at Omnitrax.

Premier Brian Pallister has been scathing in his comments about how Omnitrax has acted in the preceding year of isssues surrounding the port and the rail line. A late-Friday statement on the fuel issue matched that tone.

"This latest gamesmanship by OmniTRAX is more than unfortunate, and the people of Churchill deserve better," wrote Andrea Slobodian, a spokesperson for Sustainable Development.