FIXING THE HIGH COST OF FUEL IN B.C.'S LOWER MAINLAND
First uploaded July 20, 2018
This is how to reduce the high cost of gasoline, diesel, and jet fuel in the Lower Mainland and Islands of B.C.
Total demand for refined petroleum products, including gasoline (87,000 bbl/d), diesel (66,000 bbl/d) and aviation fuel (30,000 bbl/d), in the Lower Mainland and Islands of B.C. was 197,000 bbl/d in 2016.
Only about 50,000 bbl/d of that demand is met by the Burnaby refinery. Alberta refiners batching fuels down the existing Trans Mountain pipeline supply 100,000-120,000 bbl/d and the rest (30,000-50,000 bbl/d) is imported from U.S. Puget Sound refineries by barge and truck.
Apportionment among shippers wanting more capacity than available in the existing 300,000 bbl/d Trans Mountain pipeline limits how much refined petroleum product can be shipped from Alberta refineries to B.C.’s Lower Mainland.
If the Trans Mountain expansion is built, and that is by no means certain, the existing Trans Mountain pipeline would be free to batch primarily refined products and sweet, light oils from Alberta.
Dilbit (sour heavy crude) and conventional medium and light sweet and sour crudes could be shipped primarily in the proposed new twin line for export to Puget Sound, California, Gulf Coast, and Asian markets — in that order.
It is imperative that Canadian companies like Parkland, Suncor, and North West Refining:
- have first rights to nominate for enough crude and refined product capacity to meet all of the fuel demand in the Lower Mainland and Islands;
- ensure they have enough refining capacity in Alberta and B.C. to meet all of the Lower Mainland’s and Islands’ fuel needs;
- build a distribution/retail network to market Canadian products and end the import of U.S. fuels refined from Canadian crude into B.C.;
- meet the increasing demand for JetA1 fuel at Vancouver International Airport — Canada’s second busiest airport; and,
- prepare to meet the demand resulting from new regulations by the International Marine Organization to replace high-sulphur marine fuel with low sulphur marine fuel in 2020.
These measures will ensure adequate and secure domestic fuel supply for B.C.’s Lower Mainland and Islands’ and that their high fuel prices revert back closer to the norm in the rest of Canada.
It would also help if B.C. municipal and provincial governments scaled back on some of the highest fuel taxes in Canada.
Mike Priaro, P.Eng.
Calgary
403-281-2156
