Lead investigator Don Ross said tests showed the oil was initially graded properly for road transport but was inexplicably downgraded when it came time to move it by rail.
"When we analysed the product samples from the nine intact tank cars from the Lac-Megantic accident we identified the product as having the characteristics of a packing group 2 flammable liquid," he told a news conference Wednesday.
"Packing group 2 is the packing group that gasoline is in."
The Lac-Megantic oil was improperly identified as a less-hazardous packing group 3 product, and investigators want to know why.
"We're asking those questions," Ross said.
"Is there any motivation? Why would that be shown the way it was, whether there was any commercial interest, any operating reason? We're asking all those questions."
The July 6 crash killed 47 people and destroyed much of the centre of the picturesque Quebec town after an unmanned, runaway train derailed and exploded in a fireball.
Almost immediately there were questions about why a rupture of crude-oil tank cars proved so explosive.
The TSB analyzed the Lac-Megantic oil, as well as from another train farther down the tracks carrying crude from the same supplier. Both were more volatile than their placards indicated.
"The lower flash point of the crude oil explains in part why the crude oil ignited so quickly once the Class 111 tank cars were breached," Ross said.
The board's report says the oil in the train came from 11 different wells in the Bakken Shale formation of North Dakota. The various shipments had initially been classified differently, with some rated in the most volatile packing group 1. When trucked to the rail terminal by several different firms, the oil was all labelled group 2.
But for purposes of the rail shipment to Sant John, N.B., the entire load was graded as the least volatile packing group 3.
Cargo volatility plays into what type of rail car is used, said Ross, "which also calls into question the adequacy of Class 111 tank cars for transporting large quantities of low flashpoint flammable liquids."
Older DOT-111 tankers, the most common tank cars on the rails, have been criticized since the 1980s because their hulls are easily breached in a collision or derailment.
The safety board has issued a directive asking regulators in both Canada and the U.S. to look at the way hazardous goods are documented.
Transport Minister Lisa Raitt responded with a statement saying she has directed her officials "to examine this recommendation as quickly as possible."
"If a company does not properly classify its goods, they can be prosecuted under the Transportation of Dangerous Goods Act."
But NDP transport critic Olivia Chow said that's not enough.
"We call on the Conservative government to follow (U.S.) President Obama's lead in launching more spot checks and safety inspections to ensure proper labelling of railway cars carrying dangerous materials," Chow said in a release.
"Likewise, the dangerous DOT-111A tanker cars have to be retired or upgraded immediately."
It's not yet clear is how an improperly graded cargo may have played into the Lac-Megantic disaster.
Ross said firefighters who battled the inferno would not have responded any differently.
There are also no rules that cite cargo volatility to limit the number of tank cars that can be carried by a single train.
Ross said it is the responsibility of the buyer — in this case Irving Oil — to ensure rail carriers are properly apprised of the cargo characteristics. It was a subsidiary of the American supplier — Miami-based World Fuel Services — that gave CP Rail and the Montreal, Maine and Atlantic Railway, or MMA, the erroneous packing group 3 information.
World Fuel Services said in an email that the Lac-Megantic cargo was identified in the proper class, but the company did not respond to questions about why the packing group was changed from 2 to 3.
"The packing group assigned to this cargo would not have changed the manner in which it was handled, transported, routed or responded to by emergency personnel upon MMA's derailment," said the company's emailed response from an unidentified spokesperson.
Ross stressed that the investigation continues, including on the structural integrity of the tank cars given the speed and severity of the derailment, and on the composition of the oil.
"Investigators made it clear that even if the rules on labelling the oil had been followed, nothing would have significantly changed to lessen the extent of the disaster," said Keith Stewart of Greenpeace Canada.
"We need the federal government to focus more on protecting our communities and our environment, and less on keeping transportation costs low for oil companies."
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