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Bob Larocque_CFA Pres

Q&A with Bob Larocque, new president & CEO at the Canadian Fuels Association

 

Bob Larocque_CFA PresOCTANE:  You have been on the job for a few months now – what are your first impressions of Canada’s transportation fuels sector?

Larocque: From day one at the Canadian Fuels Association, I have been blown away by the deep technical expertise and the continuous improvement mindset that exists among CFA staff and members.  Previously, I had some exposure to CFA and its staff during my time at the Forest Products Association of Canada, but I have gained an appreciation of the critical importance of our industry since the pandemic started, as well as an excitement about where we are headed.

OCTANE:  It’s always challenging to work in a new industry, but taking on a leadership role at CFA must be even more difficult in the middle of a pandemic with declining demand for your products.  What is your assessment of the health of transportation fuels in Canada?

Larocque: During the early days of the pandemic, our industry demonstrated that we are a part of Canada’s critical infrastructure.  CFA members and their employees went above and beyond to ensure that the fuel supply was maintained to support critical services like the movement of medical supplies and food.  Throughout our response to COVID-19, we have reinforced the value that our sector has created for Canadians for more than 100 years.  While the pandemic has not been easy on CFA and its members, we are proud of our contribution during the response and look forward to playing a significant role in Canada’s recovery efforts.

OCTANE:  How do transportation fuels fit into Canada’s plans to ‘build back better’?

Larocque:  Our industry has a long history of using innovation to continuously improve our environmental footprint and adapt to the changing needs and expectations of consumers.  This is an exciting time for our industry and we believe that we can support a strong, resilient economy while making a significant contribution to Canada’s targets for emission reductions.  This fall, we will be releasing a ‘vision for 2050’ for our industry that outlines how lower-emission transportation fuels will be part of Canada’s energy mix for generations to come.  This will be achieved through our pursuit of innovative products and processes as well as new ways to leverage Canada’s transportation fuels infrastructure.  We can’t wait to share this with our partners and stakeholders – stay tuned.

OCTANE:  What about the upcoming national Clean Fuel Standard?  How is the CFA involved?

Larocque:  The Canadian Fuels Association has supported the concept of a national Clean Fuel Standard (CFS) since it was first introduced in 2016.  Our members are the principal obligated parties for the liquid component of the CFS and are committed to the success of this policy.  We believe that leveraging Canada’s existing refining and transportation fuel infrastructure is essential to making this happen.   For more than 100 years, our domestic fuels infrastructure has achieved the scale, reliability and accessibility required to successfully move people and goods throughout Canada and beyond.  We will continue to share our knowledge and insight to ensure that we maintain refinery competitiveness, ensure energy security over the long term and meet the GHG reductions of the Clean Fuel Standard.


Atlantic provinces’ appeal for delay in federal Clean Fuel Standard goes unheeded

A last-minute push by the Atlantic provinces to have Ottawa delay and further study its proposed new Clean Fuel Standard was not reflected in draft regulations published Friday.

In a joint letter sent Nov. 30, the energy ministers from the four Atlantic provinces had asked federal Environment Minister Jonathan Wilkinson to conduct more detailed analysis before presenting the national fuel standard.

The standard is intended to reduce greenhouse gas emissions by reducing the carbon in fuels people burn to run their cars or heat their homes. It’s part of an overall federal climate strategy, including an increase in the federal carbon tax, that the Liberal government says will allow Canada to meet or exceed its Paris Agreement commitments.

Ministers on the East Coast are concerned about issues in their region where heavy industry has a much smaller presence but where other considerations such as the widespread use of home heating oil are top of mind.

The requirement “is expected to have a disproportionately negative economic impact on Atlantic Canadians,” the Atlantic ministers wrote in their letter, without offering specifics.

The region has few energy options. Only cities such as Halifax, Moncton, N.B., Saint John, N.B., and Fredericton have access to natural gas, so home heating oil dominates the market. It is used in 78% of P.E.I. homes, and most communities on the mainland are similarly reliant.

The draft rules acknowledge the region’s challenges, including dependence on gasoline for transportation, a lack of renewable alternatives and oil use for home heating.

“It is estimated that provinces in Atlantic Canada would be more negatively affected by the proposed regulations,” government analysis accompanying the draft regulations reads. “This is largely because the Atlantic Provinces use more (light fuel oil) for home heating than other provinces.”

However, apart from an exemption for Newfoundland and Labrador that will not require renewable content in the province’s fuel mix and a commitment to consider “measures to accelerate the transition” away from home heating oil in the Atlantic provinces, the four provinces’ requests went unanswered.

Jinks O’Neil, a musician and chartered accountant in Sydney, N.S., has relied on oil for heat for more than 30 years and has seen energy transition before. His furnace was converted from coal burning to oil in the 1980s. He is willing to change again, but it is unclear what homeowners should do next to comply.

“I’m all for the green initiative, and I support all efforts to make our world greener for generations to come” he said in an interview. “But it has to be available and affordable.”

Without other options, the new rules “won’t change the behaviours of people in my community,” O’Neil said.

The Atlantic provinces agree that consumers in their region have few alternatives. The ministers said in their letter that their provinces “have very limited ability” to make use of the greenhouse gas reduction opportunities proposed in connection with the new fuel standard.

Work on the Clean Fuel Standard began in 2016. According to Environment and Climate Change Canada’s timeline, the publication of draft regulations marks the beginning of a 75-day comment period. They are due to be finalized in late 2021 before starting to come into force in 2022.

Collectively the Atlantic ministers requested that the federal government delay implementation and work to “mitigate the inequitable burden placed on the region,” but no delay is being proposed.

Teika Newton of the Climate Action Network acknowledges the fuel standard presents regional challenges but backs the proposal.

“We all have a responsibility . . . to collaborate to find ways to lower Canada’s emissions,” she said. “We don’t have time for delay any longer.”

Had Ottawa agreed to the Atlantic provinces’ request, it would not be the first time regional circumstances were taken into account in relation to fuels. When the initial requirement for renewable content in motor fuels was introduced in 2010, exemptions were made for remote regions such as Newfoundland and Labrador and the North.

It’s expected the Clean Fuel Standard would increase the cost of a litre of gasoline by up to 11 cents over the next decade. Officials say it would reduce carbon emissions by nearly 21 megatonnes by 2030.


Rules for fuels: Federal government proposes regulations for Clean Fuel Standard

The federal government has proposed rules for its Clean Fuel Standard that producers and distributors would have to follow under its climate plan.

“As the world moves to a cleaner economy, countries and businesses around the world are making a major shift to cleaner and non-emitting fuels,” said Environment Canada spokeswoman Moira Kelly in an email.

“Canada can – and should – make these fuels right here at home.”

The Clean Fuel Standard’s aim is to reduce greenhouse gas emissions by reducing the carbon in fuels people burn to run their cars or heat their homes. It is part of an overall federal strategy that the Liberal government says will allow Canada to meet or exceed its Paris climate agreement commitments.

It’s expected it would increase the cost of a litre of gasoline by up to 11 cents over the next decade. Officials say the standard would reduce emissions by nearly 21 megatonnes by 2030.

An analyst at the Pembina Institute, a clean-energy think tank, said the proposed rules would encourage cleaner vehicles. Transportation is one of Canada’s largest sources of greenhouse gas.

“Clean fuels such as sustainable biofuels, low-carbon hydrogen, and electricity from renewables are at the core of all countries’ net-zero ambitions,” said Bora Plumptre. “We applaud the federal government for taking this long-heralded next step to build Canada’s competitive advantage in these key sectors.”

The Canadian Association of Petroleum Producers, saying it would take more time to review the lengthy document, was more cautious.

“(The association) supports measures that incentivize innovation and deliver emissions reductions while avoiding increased costs,” it said in a release.

The regulations would require producers and distributors of fossil fuels to reduce their carbon content by 2.6% by 2022 and by 13% by 2030. Companies could achieve that by reducing carbon emitted during production and use of those fuels or by earning credits to apply against emissions.

Federal officials say the proposed regulations would make it easier for industry to meet the standard.

Producers would have more flexibility in how to reduce emissions. Energy efficiency, cogeneration, electrification and methane reduction could all qualify for credits.

Import rules would be tightened to ensure biofuels brought into Canada were actually reducing carbon emissions in their country of origin.

The rules would also enable fuel distributors to earn credits by helping drivers switch to electric vehicles by, for example, building charging stations.

Failing to meet the standard’s targets could result in fines under the Canadian Environmental Protection Act.

Current requirements to add biofuels into diesel and gasoline would remain and become part of the new regulations.

Renewable Industries Canada represents companies that produce renewable fuels, products, and technology. It called the proposals “an important step forward in Canadian policy towards recognizing the full value of clean fuels … in the fight against climate change.”

The Canadian Chamber of Commerce said in a tweet that it was encouraged that the federal government is listening to its concerns.

The regulations now enter a 75-day comment period. If adopted, they would come into force in 2022.