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Source: Wikipedia Kanesatake, Que.

New reserve-based gas station honours tax rights

Source: Wikipedia Kanesatake, Que.

Source: Wikipedia Kanesatake, Que.

Bayside Convenience and Gas sells fuel at 35% off

What if we offered a service that rightfully belongs to Onkwehon:we?

This thought is exactly what drove Gail (Scotty) Nelson and her husband Larry Daye to build a gas station that would provide fuel tax exemption to their clients.

On October 6, Bayside Convenience store became the first gas station not only in Kanesatake but in its sister-community Kahnawake, where drivers can fill up their car without having to pay tax.

“If you tank up, you save a lot of money,” said Nelson.

The Revenu, Quebec program was introduced in 2011 so that anyone with a registration card from reserves or settlements could benefit from fuel tax exemption. Despite a few gas stations in Kahnawake offering some deductions, Bayside’s 35% off comes as quite an attractive option, but Nelson doesn’t see her initiative as a competition.

“From the very beginning, I never felt like I was a threat to other gas stations in the community,” said Nelson whose goal was to simply provide the service. Two other gas stations near the community, Belisle and Crevier, also take off the taxes at the pump.

The newly-renamed Bayside Convenience and Gas owner said she received a lot of positive feedback since they started to offer the fuel tax exemption. She noticed that even people from Kahnawake were making the 35-minute drive to her business.

Kahnawa’kehro:non Tehosterihens Deer has owned his car for the past three years. He used to drive to Kanesatake to get the gas on occasion, but the pandemic has restrained him from going anywhere.

“That saves up a lot on gas,” said Deer.

Prior to COVID-19, Deer would go through $80 in gas every five to six days. Now, the same amount can last up to 10 days. With the upcoming winter, he sees Bayside’s new service as a good way to stock up on fuel while saving money.

The store, located near the Mohawk Council of Kanesatake (MCK) office, was the Kanehsata’kehro:non couple’s plan for retirement. They repainted and refurnished their old wood shop where they had been working since 1995, and opened Bayside in 2016.

Over the years, they added a variety of items to their store, such as crafts from locals.

The idea of one day transforming the store into a gas station was there from the beginning, said Nelson.

The construction started earlier this summer on July 4. Nelson had a hard time contacting Revenu Quebec for the tax exemption system.

She said she repeatedly called, sent letters and was bounced around to different departments before being told that it was already in place.

“Because we are located on the territory of the settlement, they took care of everything,” said Nelson, who didn’t have to finance any of the system’s installation.

Bayside Convenience and Gas is now open from 5:30 a.m. to 9 p.m. from Sunday to Wednesday – and until 10 p.m. on Thursday to Saturday.


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Pump Chats Podcast

Pump Chats logo

OCTANE and Convenience Store News Canada are pleased to present Pump Chats, a new monthly podcast hosted by Jennifer Stewart, CIPMA president and CEO.

Get to know leading companies and influencers of Canada’s gasoline and convenience sector. Hear from top analysts on what’s next for the industry, how it’s weathering COVID-19, and its evolution to a cleaner, more sustainable tomorrow.

 


Pump Chats Episode 1

Meet Jessica Friesen, a third-generation owner and operator of Gales Gas Bars, which have been servicing the Niagara region since 1967. Friesen talks about her biggest accomplishments since taking over in 2014, navigating during COVID-19 and the importance of keeping focus on the company’s vision.


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Advances in design define underground fuel storage systems

For more than 60 years fibreglass underground storage tanks (UST) have been the gold standard for the fuel industry. Before this time gas retailers were plagued by metal tanks that corroded, leaked and spilled leaving costly messes operators were obligated to clean up.

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Owens Corning came to the rescue in 1963 with the first models of fibreglass reinforced plastic underground storage tanks. These new storage systems defied corrosive elements in fuel products. The first model offered a non-ribbed tank that had tapered ends for easy storage. Owens Corning discovered this model did not hold up well to the pressures from being buried and it developed buckling dimples in later models to help tanks stand up to the pressures of backfill. Next, footings were added to the ribs. This enhanced the strength and the design was largely complete. 

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 With a basic design in hand, Owens Corning sought to prove the efficacy of these new tanks to regulators. Testing organizations such as Underwriters Laboratories (UL)  and Factory Mutual were brought in to demonstrate the tanks’ reliability. The testers advised using hemispherical end caps and they showed a need to revise surface loads, uneven supports, and external pressure resistance before accreditation could be given to the model. Owens Corning Model C was the first fibreglass tank with UL and Factory Mutual approval. Remarkably, the majority of these specifications created in the 1960s have remained relatively unchanged, an indication of the quality of the early work by engineers.

Once the tanks were standardized, petroleum retailers began work to determine how these fibreglass storage systems would best work at their sales sites. It was discovered that pea gravel and properly sized crushed stone were the best backfills to work with the designs that offered rounded end caps. Owens Corning patented its Model C in 1979 and the industry got busy replacing and upgrading its underground storage capability with these safer and more robust products.

Today, these designs have become the norm as the fueling sector looks for containment products that are safe, stable, and cost-effective.

Screen Shot 2020-09-28 at 5.51.43 PMAccording to Robert Renkes, executive director with the Fiberglass Tank and Pipe Institute, a Tulsa-based trade association where the fibreglass reinforced thermoset plastic (“FRP”) industry works together toward the common goal of advancing the use of members’ fibreglass products, tanks have become much larger than they were years ago. “There are about 530,000 underground storage tanks in the U.S. This is down from over 2 million. The reasons are that capacity has grown and tanks are compartmentalized to hold a variety of products such as multiple grades of fuel and diesel. Tanks today are better. There are fewer of them. They tend to be double-walled and they are better installed than at any time in the past,” he says mentioning that the vast majority of USTs are covered by a 30-year warranty.

Renkes points out that back in 1988-1989  most underground tanks had been improved from single-walled steel versions. “A huge number of new fibreglass tanks went into the ground about 30 years ago. Our experience tells us they are continuing to do the job, but insurance companies and regulators now have concerns because of warranty issues. Warranties are based on the assumption that tanks have a ‘specified’ useful life expectancy. No-one really knows what this is. Tanks would have to be removed and analyzed to determine this. Should 30-year old tanks be removed and replaced? We do not know at this time, and there is nothing that tells us fibreglass tanks are failing,” he says, adding that one of the challenges operators may now face is rising insurance rates due to uncertainty from underwriters. Currently, there are some 13 insurance co’s in Canada and the US that offer protection for fuel storage tanks, some of which are now offering a variety of rates depending on the age of the tank.

What’s new in tanks?  The Petroleum Equipment Institute (PEI), an organization that offers best practices on engineering for the installation of USTs, has just released a new series of advisements in a document titled Recommended Practices for Installation of Underground Liquid Storage Systems (RP100). Directed to oil company engineers, trade associations, environmental regulators, equipment manufacturers, and installation contractors, RP100 suggests the following:

• Revision of Section 10.13 to remove the recommendation to use metallic risers.

• A new recommendation that installers should confirm riser pipe is compatible with the product transferred/stored and approved for use by the authority having jurisdiction.

• A warning to use proper grounding techniques to dissipate static charge accumulation if a nonconductive riser pipe is installed.

• A note recommending the use of drop tubes to reduce turbulence and vapour buildup during fuel deliveries.

“Over the past ten years there has been concern about using non-metallic risers on tanks, “ says Renkes. “There was pushback years ago about using PVC and as a result, the industry became stalled on using non-metallic risers. With the UL listing of FRP risers demonstrating there is strength in thick gauge reinforced fibreglass plastic, the industry can now offer a complete non-corrosive tank and represents a great alternative and non-corrosive improvement for the trade.”

Renkes advice is for operators is to work diligently to keep water out of USTs, especially those that hold ultra-low sulphur diesel. “Water keeps alive microorganisms that go after metal and even though there is very little in the way of metal in current models of USTs these ‘bugs’ will work to corrode any metallic UST components.”

Canada and UST

While US manufacturers such as Owens Corning (became Containment Solutions in 1995) and Xerxes/ZCL were behind early developments in product design for underground fuel storage, Canada developed its own regulatory environment that mirrored those in the US.

Screen Shot 2020-09-28 at 5.51.22 PM“Certainly, we have our own regulations and codes and these include manufacturers’ recommendations,” says Michelle Rae, executive director Ontario Petroleum Contractors Association (OPCA). She mentions that it is the manufacturers that advise on the lifespan of tanks, but organizations such as Underwriters Laboratories of Canada (ULC) and the Technical Standards and Safety Authority (TSSA) [ the TSSA is an independent, not-for-profit organization responsible for the delivery of a range of safety services in Ontario] are behind overall standards that govern codes, installation methods and maintenance best practices. For example, this January, TSSA advised that all double-wall underground pressure piping systems that were installed before January 1, 2006, be upgraded with Electronic Line Leak Detection (ELLD) by October 1, 2021.

“There are two Federal codes in Canada that govern underground storage tanks. There are the National Fire Code and the CCME (Canadian Council of Ministers of the Environment) where their Contaminated Sites Working Group has developed an environmental code of best practices. Provinces also each have their own stipulations,” she says pointing to the Alberta Fire Code as an example where authority for permits to install, remove or alter a tank are granted by local fire departments, or the TSSA’s Liquid Fuels Handling Code in Ontario.

Rae suggests its important to have a preventative maintenance program in place and operators should be prepared to keep accurate records that include installation date, monitoring data, and maintenance. “Insurance companies want good record keeping. Those without good records could expect higher rates or challenges with policies. And, this represents a small investment in time and labour costs that could end up saving big dollars down the road,” she says, concluding that petroleum contractors and UST manufacturers stand out as good sources of information on best practices.   

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Christian Flach, CEO Greenergy

Greenergy acquires Amber Petroleum

Fuel distributor Greenergy has acquired 100% of Amber Petroleum, an independent fuel distributor and retailer based in the Republic of Ireland. The deal offers Greenergy access to Amber’s 35 sites around the country. Amber sites are both company-owned and dealer-owned operations and offer vehicle fuel products as well as home heating petroleum.

Christian Flach, CEO Greenergy

Christian Flach, CEO Greenergy

“One of our key strategic objectives is to integrate our existing supply footprint with our expanding retail presence,” said Christian Flach, Greenergy CEO. “The acquisition of Amber follows our recent retail investment in 230 retail sites in Canada, and will enhance our capabilities in Ireland by building on our existing infrastructure, supply and retail operations.”

Liam Fitzgerald, owner and managing director of Amber Petroleum concurs, adding that Amber has served a loyal customer base for more than 40 years. “Amber’s success has been based on strong relationships with customers, suppliers and staff and we know that Greenergy shares these same values.”

Greenergy entered the Canadian market in 2013. This year they merged with Markham, Ontario’s BG Fuels, a gas retail operator with a significant presence in central Canada. Behind Greenergy’s success are extensive investments in marine and rail-fed storage terminals as well as in road haulage capability that allows them to import and distribute their blended fuel products to independent retailers.

In the United Kingdom where Greenergy is based, the company supplies more than 25% of the road-fuels market.


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Parkland posts lower Q2 net income of $32 million as fuel sales fall by 14%

UnknownService station operator Parkland Corp. is reporting higher-than-expected second quarter earnings despite pandemic-related hits to its sales volumes.

The Calgary-based company says net income in the three months ended June 30 was $32 million on revenue of $2.7 billion, down from $105 million on revenue of $4.85 billion in the same period a year ago.

Its net earnings per diluted share were 21 cents, compared with 70 cents last year. Analysts had expected a loss of 38 cents, according to financial data firm Refinitiv.

Parkland, which purchased the Caribbean fuel retailer Sol early last year, says volumes in its international segment are trending about 20% lower in July compared with last year because some markets have temporarily increased restrictions due to rising COVID-19 cases.

It says overall fuel and petroleum product volumes decreased by 14% in the second quarter compared with the year-earlier period but strong fuel margins and convenience store traffic, along with cost cutting, drove an over 30% increase in adjusted earnings in Canada.

Parkland, which sells fuel through more than 2,600 service stations in Canada, the United States and Caribbean, cut its budget to $275 million in March, down from its earlier guidance of $575 million. It says it will restore $50 million to account for stronger cash flow than expected and higher maintenance spending.

“We delivered solid margins, won new business and successfully managed our cash flow by reducing costs and controlling capital expenditures,” said CEO Bob Espey in a statement.

“Our financial and operating performance through the second quarter demonstrates the flexibility and resilience of our diversified business model. While we remain nimble in light of ongoing COVID-19 uncertainty, we are confident in our ability to advance our growth agenda.”


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Forecourt Performance Report 2020

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Choice is now a greater option for both Canadas motoring public and retail fuel operators with more independent petroleum brands and fewer refinery controlled sites coast to coast to coast. This was a key finding in this years National Petroleum Site Census, a watershed study that is done each year by The Kent Group Ltd.

 Based in London, Ontario, The Kent Group Ltd. is a data-driven consultancy that is a leading authority on fuel sector marketing, economics, performance measurement and benchmarking, as well as price/margin reporting/analysis, regulation, and industry economic research and analysis. Since 2004 The Kent Group Ltd. has been the go-to organization for the latest and most complete set of data that describes Canadas retail fueling sector.

Download the full report here

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Parkland teams up with Amazon Web Services to ramp up digital transformation

UnknownParkland Corporation is collaborating with Amazon Web Services to use analytics in order to improve its logistics and enable frictionless commerce.

“We are excited to be teaming up with AWS to advance our strategic priorities and support our ambitious organic growth targets,” Ian White, SVP strategic marketing and Innovation at Parkland, said in a release. “AWS is a renowned global technology leader who is laser-focused on customer experience and innovation.”

The goal, adds White, is to uncover valuable insights into “customers’ needs and preferences to provide enhanced services, products and personalized offers.”

The company says it has been building its internal capabilities to leverage digital technology trends for some time and has identified several technologies and customer-centric opportunities that support organic growth. These include:

  • Loyalty program data optimization (including the Canadian JOURNIE rewards loyalty program) and personalized customer offers;
  • Real-time price optimization using enhanced data feeds and machine learning;
  • Progressing a vision for the convenience store of the future.

Next steps include “monitoring fuel inventories in real-time and optimizing routing and distribution, harnessing digital to help scale the business without adding significant cost and complexity, and improving the speed and efficiency of M&A integration.”

White says that by embracing digital to focus on the customer experience, Parland aims to drive organic revenue growth and margin expansion. “Digital services are changing constantly and teaming up with AWS helps us channel those developments to elevate our customer focus and enhance our core competencies of retailing, customer loyalty, pricing, supply and distribution.”


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BG Fuels to trade as Greenergy following merger

Fuel supplier Greenergy continues to make news. The company entered the Canadian market in 2013 as a price and service-based supplier that offered a unique approach to distribution. This year (February) Greenergy merged with gas and retail operator BG Fuels as they sought to expand in the national market. Now, the company has announced that together they will trade as Greenergy.  

Christian Flach

Christian Flach

“Over recent months our priority has been to support our customers through the challenges associated with COVID-19, while also moving swiftly to integrate our combined Canadian operations into one team,” says Christian Flach, CEO of Greenergy.  “As a fully integrated downstream fuels business, we are now best-placed to extend our presence across Canada and deliver on our ambitious growth strategy in the years ahead.” 

Altogether, Greenergy’s combined Canadian business now has significant capability and expertise spanning the whole supply chain, from fuel origination, infrastructure, and supply to gas and convenience retailing. The retail brand portfolio includes both company-owned and independent retailer sites, operating under the Mobil, Mr. Gas, Waypoint, Breakaway, and Inver brands.

 


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Alimentation Couche Tard Q4 profits nearly doubles despite lower revenues

couche-tard2-780x520Alimentation Couche-Tard Inc. beat expectations as it capped its fiscal year with profits nearly doubling in the fourth quarter despite a revenue decrease mainly due lower fuel demand because of COVID-19.

The Laval, Que.,-based convenience store operator reported after markets closed that it earned US$576.3 million or 52 cents per share for the period ended April 26. That compared with US$293.1 million or 26 cents per share a year earlier.

“This year, Couche-Tard became a better, and stronger company,” said CEO Brian Hannasch. “Our agile, decentralized model and advancements in operational excellence allowed us to face the unprecedented challenges of the COVID-19 crisis and fare far better than many other businesses.”

Reporting in U.S. dollars, Couche-Tard results were affected by a pre-tax gain of $41 million on the sale of its U.S. wholesale fuel business, a $22.8 million foreign exchange gain and $4.6 million adjustment on deferred taxes.

Excluding one-time items, adjusted profits were $521 million or 47 cents per diluted share, up from $289 million or 26 cents per share a year earlier.

Revenues decreased 26.1% to $9.69 billion from $13.11 billion, largely due to 34% decrease in fuel volumes.

“We also had a strong fourth quarter with positive traffic trends to begin with before we endured significant decline in traffic and fuel volumes with the pandemic stay-at-home orders implemented across our global footprint,” Hannasch added.

He said customers changed their shopping behaviours by purchasing more at each visit, including more impulse and emergency items.

Implementation of physical distancing measures decreased traffic across its entire network, starting mid-March in Europe and slightly later in North America.

Merchandise product demand shifted during the pandemic, which hurt margins.

Merchandise and service revenues decreased 2.6% to $3.2 billion with same-store revenues falling 0.5% in the U.S., 6.5% in Europe and increased 4.7% in Canada.

Merchandise gross margin decreased 0.9% in the U.S. to 33%, by 1.2% in Europe to 40.6%, and 1.2% in Canada to 31.8%.

Fuel sales declined rapidly during the first weeks after stay-at-home orders, but margins remained healthy.

Same-store road transportation fuel volume decreased 18.3% in the U.S., 13.4% in Europe, and 23.5% in Canada.

The retailer was expected to earn an adjusted profit of 43 cents per share on $9.36 billion of revenues, according to financial markets data firm Refinitiv

For the full-year, it earned $2.35 billion or $2.09 per share on $54.1 billion of revenues, up from $1.83 billion or $1.62 per share on $59.12 billion of revenues in 2019.

The results demonstrated Couche-Tard’s resiliency with better-than-expected same-store sales, said Derek Dley of Canaccord Genuity.

He said the 0.5% decrease in U.S. same-store merchandise sales was much better than his estimate for an eight% decrease.

Fuel margins rose to a record 46.9 cents US in the United States and were high in Europe and Canada as well, Dley added in a research note.

“With consolidation likely to accelerate over the next six to 18 months, in our view, we believe Couche-Tard is in an advantageous position to take advantage of what is likely to become a ‘buyers’ market,” he said.


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Suncor takes flight with AvGas venture

Screen Shot 2020-06-08 at 2.09.56 PMSuncor has teamed with Japanese partners to fund an innovative new project called LanzaJet that will develop sustainable aviation fuel (SAF) and other products.

Suncor Energy Inc., alongside Japan-based trading and investment company, Mitsui & Co., Ltd., will invest (US)$25 million to establish the LanzaJet demonstration plant at Soperton, Georgia.

The facility will be operated as an integrated bio-refinery by LanzaTech using sustainable ethanol sources to produce almost 38 million litres per year of SAF as well as renewable diesel. Hopes are the plant will start production in early 2022. The initial investment is coupled with participation from All Nippon Airways (ANA) and will complement an existing (US)$14 million grant from the US Department of Energy.

Suncor reports it has contracted to take a significant portion of the SAF and renewable diesel produced at the facility to provide its jet fuel and distillate customers. “These products are very complementary to our existing product mix and we see growth potential in both North American and international markets,” says Mark Little, President and CEO of Suncor. “Suncor is committed to both a low carbon future for our own business and to helping our customers, including in the space of commercial aviation, realize their vision of a sustainable future.”

Heading LanzaJet as CEO is Jimmy Samartzis, an aviation industry veteran who was pulled from his role as a Director with the Fermi National Accelerator Laboratory.

 

The LanzaJet process can use any source of sustainable ethanol for jet fuel production, including, but not limited to, ethanol made from recycled pollution, the core application of LanzaTech’s carbon recycling platform. Commercialization of this process, called Alcohol-to-Jet (AtJ) has been years in the making, starting with the partnership between LanzaTech and the US Energy Department’s Pacific Northwest National Laboratory (PNNL). PNNL developed a unique catalytic process to upgrade ethanol to alcohol-to-jet synthetic paraffinic kerosene (ATJ-SPK) which LanzaTech took from the laboratory to this pilot project.

Contact OCTANE editor Kelly Gray at Kgray@ensembleiq.com