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Ontario hikes ethanol content

Screen Shot 2020-11-30 at 12.23.43 PMThe province of Ontario has announced it will increase the requirements for ethanol in gasoline. Currently, ethanol content must be 10%. By 2030 fuel retailers will have to offer blended gasoline with an ethanol content of 15%.

The move will be gradual. The province is mandating changes starting in 2025 when ethanol content moves up to 11% from 10%. By 2028 ethanol content must by 13% with the final target of 15% reached by 2030.

The changes will impact greenhouse gas emissions. Ontario projects that the new regulation will amount to having 300,000 cars taken off the roads.

Ontario farmers are positive about the change that will see more corn planted and more demand for their crop. The new E15 ethanol blend will see farms up their acreage from the current three million tonnes that are grown now to produce E10 blended fuels.

Ontario is the first province to go this far with an ethanol program.

“We know about one-third of all greenhouse gas emissions in the province come from transportation, which is why increasing the amount of renewable content in gasoline is such an important step towards fighting climate change and driving down emissions,” said Ontario Environment Minister Jeff Yurek.


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ExxonMobil Canada cuts staff

Cost-cutting and layoffs continue in Canada’s oil and gas sector. Last week, ExxonMobil Corp announced plans to reduce its Canadian workforce by 300 positions. Citing the COVID-19 driven price slump, ExxonMobil reported they will reduce positions at Imperial Oil, ExxonMobil Canada and at its ExxonMobil Business Centre Canada.

According to the company, the workforce reductions are the result of insight gained through reorganizations and work-process changes made over the past several years. The impact of COVID-19 on the demand for ExxonMobil’s products has increased the urgency of the efficiency work, they said. The company’s U.S. head office already announced massive cuts of more than US$10 billion earlier this year in a move to help reverse the negative trend.

Imperial Oil confirmed its plans to furlough 200 of its 6,000 workers in a move to cut costs in the face of a market downturn. This move mirrors Suncor’s announcement that it plans to shrink its cohort by 15% over the next year and a half.


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Parkland appoints Marcel Teunissen as CFO

0Parkland Corporation is welcoming Marcel Teunissen as chief financial officer effective December 1, 2020.

Teunissen joins Parkland from Royal Dutch Shell, where he was EVP, finance, integrated gas and new energies, responsible for the financial management of Shell’s global portfolio of LNG assets and its emerging new energy business. With more than 23 years of experience, he has worked globally across the entire energy value chain, with an emphasis on refining, retail and related infrastructure.

“I am delighted to welcome Marcel to the Parkland Team and look forward to his contributions as we embark upon our next phase of growth,” Bob Espey, president and CEO Parkland, said in a release. “His leadership experience, financial and business acumen, and broad global experiences make him an ideal fit to help drive our growth strategy and deliver market-leading results.”

Teunissen brings an extensive background in corporate finance, treasury, financial planning and analysis, tax, strategic planning and commodity & financial risk management. He has also worked in many of the markets across Parkland’s diverse geographies, including Canada and the Caribbean.

Darren Smart, who has served as interim CFO since December 2019, will return to his role of SVP, strategy & corporate development, which will be expanded to include developing and leading Parkland’s low-carbon and renewables strategy.


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Gas price war attracts drivers on the hunt for savings

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More than a few people driving through Barry’s Bay this past week had to do a double-take on the three large digital signs displayed by three local gas stations here. When most people in Ontario were paying $0.97/litre on average for regular unleaded gasoline, people filling up in Barry’s Bay were paying $0.88/litre.

“I usually get my gas where I get my smokes, at the Reserve in Golden Lake,” said Shayla Meek at MacEwen’s County Line Express in the heart of Barry’s Bay. “I usually pay about $1.47 for premium gas but today it’s $1.07 here. It’s even lower now than the Reserve.”

A few weeks ago, when MacEwen’s replaced the Esso branding at this Barry’s Bay gas station at the corner of Highway 60 and 62, MacEwen’s began driving down its local gas prices to attract new business. But in some ways MacEwen’s was only entering a price war that’s already been going on in Barry’s Bay for years. The Ultramar gas station, now managed by Jackie Chiang and located along Highway 60 in the east end of town, by all accounts had started a price war about six years ago. It left Barry’s Bay with one of the longest-running lowest average gasoline prices in the area — with one notable exception: The Golden Lake Reserve.

Or as one veteran of the gas wars in Barry’s Bay who preferred to remain anonymous said: “A big part of it is the Reserve. It is usually 6 to 10 cents below our average, but this (move by MacEwen’s) is the first time a Barry’s Bay gas station has undercut the Reserve.”

The real driving force behind the local price war begins with the usual seasonal change in the automobile gas market. The high summer volume of retail gasoline customers usually decreases by Labour Day or Thanksgiving at the latest, and so when the market grows quiet and there are fewer customers, particularly in rural, less populated areas, some nationally-branded gas companies tend to get more aggressive or as another keen observer put it, “They want to get a bigger part of that shrinking seasonal market, but with COVID this year, more people are staying around and so the fight is even worth more to them.”

Where local retail gas prices are set can also make a significant difference. In the case of Ultramar, Jackie Chaing says his prices are set each morning by his Toronto head office. The Shell Station, however, sets its own price locally. Either way, those prices are attracting a lot of out-of-town attention.

Richard Drydak arrived at the Ultramar in Barry’s Bay this past weekend to gas up for his return trip to Toronto.

“On my way up I gassed up on Hwy 11 north of Orilla, just outside of Barrie, where I paid $0.94/litre; that’s usually the least expensive Ultramar anywhere near Toronto, but when we saw the sign that said $0.88/litre, we said we’re going to stop here because you can’t beat that price!”

MacEwen’s and Ultramar gas stations in Barry’s Bay are also responding to the increasingly steeper competition now being offered up by the full-service Shell Station in Barry’s Bay located along Highway 62 on the edge of town. Unlike the other two Barry’s Bay gas stations that depend almost exclusively on their retail gasoline sales and retail store sales to make ends meet, the new Shell Station, owned and operated by Mark Stamplecoskie has, along with its gas pumps and robust retail store, a full-time licensed mechanic, a state-of-the-art car and truck wash, and a popular chip truck, a favorite with Madawaska Valley District High School students from across the street.

Michelle Recoskie, who works at Stamplecoskie’s Shell Station, says business is definitely up.

“We’re more busy because of the price.”

She used to co-own the Combermere Service Centre that gave up its gas pumps years ago. She understands why customers like the lower prices but she’s also quick to remind people that retail gasoline sales have a very thin margin for gas station owners:.

There’s no money in it.”

Still, she knows people will drive out of their way to get a good bargain, and Barry’s Bay gas prices are certainly a good bargain while they last. Take Alicia O’Brian who stopped by the Shell Station on the weekend.

“I live in Quadville,” she said. “I would normally get gas in Golden Lake, but when the price is this low here, I come here.”


MPP Deepak Anand presents Bill 231.

Ontario’s gas and dash bill passes second reading

MPP Deepak Anand presents Bill 231.

MPP Deepak Anand presents Bill 231.

Gas theft across Ontario continues to be an issue, but relief may be imminent.

Bill 231 – Protecting Ontarians by Enhancing Gas Station Safety to Prevent Gas and Dash Act, 2020 – has passed second reading and is one step closer to becoming law.
While prepayment for fuel is already mandated in British Columbia and Alberta, as well as many states in the U.S., Ontario had yet to pass any similar legislation, despite calls from the industry to do so.  The tragic killing of Toronto gas attendant Jayesh Prajapati in 2012 sparked drew attention to the issue of gas theft in the province and led to calls for a mandated change to the system.

The Private Member bill is led by Mississauga-Malton MPP Deepak Anand, who said on Facebook that he is “thrilled” the bill is moving forward: “This Bill amends the Occupational Health and Safety Act, making sure employers at gas stations ask customers to prepay before filling gasoline. The act is also amended to require employers to provide training to workers involved in the sale of gasoline. Once implemented, this Bill will make sure employees at the gas station, bystanders in the gas station premises are safe, as no one will be able to run away without payment at the gas station.”
In his presentation, Anand spoke about the grief suffered by families whose loved ones have been killed or hurt during gas and dash incidents.
In a statement, Dave Bryans, CEO of the Ontario Convenience Stores Association, said his organization has been “supportive and helpful” with the government on this bill for a number of reasons:
A) Our industry has experienced year over year increases in gas thefts through drive offs
B) Employee and customer safety is paramount to the future of the convenience gas business in Ontario
C) Losses for family run gas sites have increased with no expectation of increased enforcement throughout Ontario
D) Implementing this Bill will eliminate thousands of drive offs every year, allowing the convenience operators to concentrate on daily business issues.
E) Customers and businesses in other jurisdictions where prepay has been implemented have seen no loss of business
F) A level playing field for all gas sites will insure a quick adjustment period for ease of implementation.
It’s worth noting, there would be some exemptions when it comes to compliance, such as independent gas sites that have old pumps, which would be allowed to continue with normal business practises until they were able to install new pumps with new technology.
The OCSA said that as the Bill is being reviewed by the Standing Committee, it may “call on independent gas retailers to participate in the process to encourage a level playing field as well as a quick approval of Bill 231.”

Review Bill 231 here


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Quebec to ban sale of gas powered cars by 2035

Quebec will ban the sale of new, gasoline-powered cars and SUVs by the year 2035 as part of a $6.7-billion plan to reduce greenhouse gas emissions, Premier Francois Legault announced Monday.

Legault said the new policy will help the province meet its pledge to reduce emissions by 37.5% over 1990 levels by 2030. But the premier admitted that the new measures will only move Quebec 42% of the way to its goal. He said he hopes technological advances and added investment from Ottawa will help close the gap.

“We have a duty to the next generations,” Legault told a news conference alongside Environment Minister Benoit Charette. “As I said when I was getting sworn in as premier, I could not look my two sons in the eye if I didn’t make efforts to meet this enormous challenge that all of us on the planet have.”

Legault’s $6.7-billion plan —to be spread over five years —depends heavily on the province’s hydroelectric resources powering large swaths of the economy. More than half the funding announced Monday —about $3.6 billion —will be invested in the transportation sector, for such things as subsidies to encourage individuals and businesses to purchase electric cars, trains and taxis.

Legault dismissed criticism that electric vehicles are costly, have a limited range and can be problematic for people who live in apartments and don’t have access to a wide supply of charging stations. He said the state will continue to offer subsidies and that he expected battery technology to improve over the next 15 years.

The government’s investment will also pay for more electric charging stations and to convert buildings to electric heating, he said.

Legault said Quebec’s previous target —reducing greenhouse gases by 20% over 1990s levels by 2020 —has been missed. Data from 2015 to 2017 indicated emissions were increasing—a sign Quebec is “going in the wrong direction,” the premier said.

Legault blamed that failure on previous governments. “For the first time in Quebec,” he said, “we have a plan that is costed, both in terms of costs and impact in terms of greenhouse gas reduction.”

The Opposition quickly seized on the fact the government’s plan meets fewer than half the state’s climate goals, calling Monday’s announcement “neither realistic nor ambitious.”

“Hard to agree when only 42% of the path forward is known,” Liberal climate change critic, Carlos Leitao, wrote on Twitter. He also denounced what he said was as a lack of commitment to ensuring Quebec is carbon-neutral by 2050.

Quebec Solidaire, the second opposition party, said the government isn’t doing enough to discourage private vehicle use. The party said the state should tax the owners of SUVs to encourage them to buy cars that are smaller and pollute less.

Legault replied that he preferred incentives to punishment, while Charette said Quebec’s territory is large and people outside big cities rely on larger vehicles to move around on tough terrain.

Despite it being panned by the opposition, the plan received positive reviews from a group representing business leaders in the province. The Conseil du patronat du Quebec said in a statement the government’s plan is “ambitious” and presents “new economic opportunities tied to sustainable development.”

 


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Parkland ramps up growth the latest U.S. acquisition

Screen Shot 2020-11-16 at 1.10.47 PMParkland Corporation has announced it will acquire the assets of Richfield, Utah-based Sevier Valley Oil Company (SVO).

Based in Richfield, Utah, SVO is a well-established retail and commercial fuel business with annual fuel and petroleum product volume of approximately 350 million litres. SVO’s primary operations are in Southwestern Utah, along with a presence in Northern Utah and Colorado. The acquisition of SVO adds seven retail locations and over 20 retail dealers in addition to robust diesel and lubricant distribution capabilities.

“We continue to expand our US footprint and execute on our growth strategy,” says Doug Haugh, president of Parkland USA. “This acquisition meaningfully expands our retail presence in rapidly growing Southern Utah and presents a fantastic opportunity to leverage our North American On the Run convenience store brand, enhance our customer proposition and drive incremental value.”

“The acquisition strongly complements our existing Rockies Regional Operating Center and positions us for further organic and acquisition growth in neighbouring Nevada and Arizona,” added Haugh. “We are delighted to welcome Garrett Ekker and the SVO team to Parkland and look forward to the continued growth of our USA business.”

This acquisition is consistent in value with Parkland’s previous U.S. transactions. Funding for the deal will come from existing credit facility capacity. The transaction is expected to close in the fourth quarter of 2020. 


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Shell to offer carbon offsets to fuel customers

Screen Shot 2020-11-16 at 1.04.17 PMShell Canada has announced that it will become the first fuel retailer in the country to offset carbon dioxide (CO2) emissions from customers’ fuel purchases at Shell service stations across the country. The offsets cover all emissions from the production through to the use of the fuel.
From November 12 to December 31, 2020, Shell customers can opt into the Drive Carbon Neutral program at no extra cost when they pay for fuel purchases through Shell EasyPay™ in the Shell app. Beyond December 31, 2020, Shell will continue to offer customers the ability to opt into the program by contributing 02. cents per litre. Shell will then offset customers’ emissions by purchasing independently-verified carbon credits generated from Canadian and international projects that protect or restore natural landscapes.
“Our customers have told us they want more ways to reduce their CO2 emissions and make a difference, but they don’t always know what actions to take,” said Andrea Brecka, General Manager Retail, Shell Canada. “Our Drive Carbon Neutral program is designed to help make it simpler for Shell customers to address their carbon footprint today by offsetting their fuel purchases.”
In Canada, Shell has sourced carbon credits from the Darkwoods Forest Carbon Project, an initiative of the Nature Conservancy of Canada. It markets carbon credits generated from the Darkwoods Conservation Area in Southeast British Columbia (B.C.). The conservation area protects 630-square kilometres of rare inland temperate rainforest, sub-alpine meadows and freshwater systems and protects mature and old-growth forests from being intensively harvested for timber.

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Alberta says oil and gas industry to save money with new pollution rules

Alberta has reached a deal with the federal government to establish its own rules to restrict a potent form of carbon pollution, saying Thursday the move would save the oil and gas industry money.

The agreement replaces federal regulations on methane, the main component in natural gas, with new provincial rules that would last “up to five years.” Methane is a greenhouse gas that is 86 times as powerful as carbon dioxide over a 20-year period. Federal Environment and Climate Change Minister Jonathan Wilkinson announced that a similar deal had been reached with Saskatchewan.

“Without this agreement, the federal system would apply in Alberta, costing the oil and gas industry money, and adding unnecessary red tape to our industries,” said Alberta Environment and Parks Minister Jason Nixon during an online presentation on Nov. 5.

“Alberta’s methane regulations will save job creators time, money and resources. It will cut the same amount of emissions as the federal system by 2025, but with the added benefit of cost savings for our industry.”

The oil and gas industry is the largest contributor to methane emissions because the industry flares or vents the gas into the air, and it also leaks accidentally from equipment. Research has connected a rise in global methane levels with fracking operations, and scientists say this rise in atmospheric methane is putting efforts to fight climate change at risk.

The deals with Alberta and Saskatchewan lock in an approach that the federal government’s own analysis has shown will mean that, without other additional measures, Canada will fall short of its 2025 methane reduction target. Canada committed in 2016 to cutting methane emissions 40 per cent below 2012 levels by 2025, but the approach is expected to achieve a 29 per cent cut.

Dale Marshall, national climate program manager for Environmental Defence Canada, says the federal government should have strengthened its own rules and then insisted that the provinces improve theirs. Instead, the result represents a “meek approach to reducing emissions,” he said, which “casts further doubt on Canada’s commitment to fighting climate change, even while Canadians face mounting climate impacts.”

“The Canadian government needs to stop bending over backwards to the big oil lobby and oil-friendly provincial governments at the expense of public health and action on the climate emergency,” said Marshall.

The Trudeau government says it is still committed to the 2025 methane target, and the regulations are not the only way it expects to restrict the gas. Wilkinson’s office also pointed to a $750-million federal fund meant for the oil and gas industry to help companies develop “green technologies to reduce methane emissions.”

Alberta has also rolled out an industry-funded program called the “technology innovation and emissions reduction system” that it says will support methane-reducing projects.

As well, the federal government has proposed, but has yet to launch, a “clean fuel standard” that aims to decarbonize fossil fuels used in Canada, and Ottawa also expects another $1.72-billion fund for cleaning up orphan or inactive oil and gas wells to contribute to methane reductions.

Finally, federal Natural Resources Minister Seamus O’Regan has not ruled out tightening the rules if “future data and modelling” convinces him it’s necessary.

But Marshall said the agreements would be difficult to open up before they expire at the end of 2024. That significantly increases the chances that Canada will miss its target, he said.

British Columbia has a separate agreement with the federal government on methane that was finished earlier this year.

The government said Thursday it expects to update the public on its efforts to hit the 2025 target “in late 2021.”


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New deal set for Atlantic refinery

Prospects looking brighter following Irving departure 

UnknownWorkers at North Atlantic Refining Ltd. site at Come By Chance, N.L. may see their luck change. The refinery had been set to sell to Irving Oil when the deal collapsed this October. Now U.S.-based Origin International, a Maryland company involved in oil recycling, has made a formal offer to purchase the assets of the company that include the refinery.
The deal, between Silverpeak, owner of North Atlantic Refining, and Origin International, was announced last week. Terms are still undefined as the two sides hammer out details. Expectations are that once the ink dries, Origin International will ramp refinery production back to full capacity with a full complement of workers.
As little as two weeks ago, Origin International CEO Nicholas Myerson asked that the facility be kept on ‘warm idle’ to make the transition to new ownership an easier task. “Origin is finalizing a plan that would have all employees back to work immediately after a transaction, with a restart for the plant in the second quarter of next year,” the company said at the time.
The North Atlantic Refining facility at Come By Chance employs 500 workers. The plant refines 135,000 bbl. per day of crude and contributes as much as 5% of the GDP of Newfoundland and Labrador.
OCTANE editor Kelly Gray can be reached a Kgray@ensembleiq.com