CCentral-Main-logo-EN-trans

Convenience Central
Join our community
extra content
Electric Vehicle Charging Sign Lg_112917

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.”

 


Screen Shot 2020-11-13 at 12.39.57 PM

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.

 


 * NEW

Pump Chats Episode 3

Tiina McCombie of National Energy Equipment Inc. and Dan Witkemper of Gilbarco Veeder-Root discuss how the business has evolved, the challenges faced by COVID-19, and what the future holds for the industry.


Pump Chats Episode 2 

Parkland Corporation is the fastest-growing independent marketer of fuel products in Canada. SVP Peter Kilty talks growth strategy and what’s been the company’s striving factor to success.

 

 


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.


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.


Screen Shot 2020-08-11 at 11.39.53 AM

Canadian Natural to take over Painted Pony Energy in $461 million deal

Screen Shot 2020-08-11 at 11.42.36 AMCanadian Natural Resources Ltd. has struck a $461-million deal to buy Painted Pony Energy Ltd. as it looks to grow its position in the liquids-rich Montney natural gas region of northeastern B.C.

“This acquisition further strengthens Canadian Natural’s natural gas assets and production base in key operating areas and complements the company’s diversified portfolio,” Canadian Natural president Tim McKay said in a statement.

“This transaction also allows us to further insulate against natural gas costs in our oilsands operations and has minimal impact on the company’s low overall corporate decline rate.”

The acquisition of Calgary-based Painted Pony company for $111 million in cash and the assumption of $350 million in debt is expected to close later this year.

Canadian Natural is best known as one of Canada’s largest oilsands and heavy oil producers, but it has been allocating funds to grow its natural gasoutput as well.

In a statement, Painted Pony said it is facing liquidity challenges caused by three years of weak natural gas prices and more recent declines in pricesfor the petroleum liquids produced with the gas.

It decided on a confidential process to enhance shareholder value, it said, and its board determined the corporate buyout offer of 69 cents per share by Canadian Natural was the best path forward.

Painted Pony’s shares have traded between 20 cents and 90 cents in the past year. They rose by as much as 16.9% on Monday to match the offering price.

Separately, Canadian Natural said Painted Pony’s lands in northeastern B.C. are located near its similar operations and offer potential synergies in infrastructure and pipelines.

It said the assets produce about 270 million cubic feet per day of natural gas and 4,600 barrels per day of petroleum liquids.

By comparison, Canadian Natural produced 1.46 billion cubic feet per day of gas and 922,000 barrels per day of crude oil and liquids in the second quarter.

Analysts said the transaction was good for both companies but better for Canadian Natural, whose shares were little changed on Monday.

“Although we would consider the acquisition as immaterial to base operations today (four% of total production), the purchase is consistent with Canadian Natural’s history of opportunistic acquisitions along cyclical lows, adding significant future gas inventory,” National Bank analyst Travis Wood said in a report.

Analyst Chris MacCulloch of Desjardins pointed out the offer represents a 38% premium above his 50 cents per share target price for Painted Pony, but investors may have mixed feeling about the deal.

“The acquisition certainly marks a disappointing conclusion for PONY shareholders after languishing for years under the crippling weight of elevated debt levels and depressed natural gas prices,” he said.

Painted Pony will hold a special meeting in September to vote on the deal which will require support of two-thirds of the shares.

It said holders of about 25% of its shares, including its two largest shareholders, have agreed to support the transaction.


Screen Shot 2020-07-16 at 2.19.38 PM

Forecourt’s new normal

COVID-19 has created tremendous change in the marketplace

Screen Shot 2020-07-16 at 2.20.39 PMCanadian convenience, car wash and gas businesses worked hard to keep staff and customers safe during COVID-19. Behind the effort has been a push from major retailers to enhance operational practices and from equipment manufacturers that sped design and production to meet the public health challenge.

Canadian Tire was an early adopter of PPE for customers. When the virus hit, Canadian Tire sites used disposable glove dispensers to help customers stay safe at its gas bars. At Petro-Canada and 7-Eleven sites, they didn’t offer gloves, but fuel dispensers came with a placard that asked customers to use paper towels to keep hands from touching gas dispenser nozzles. At 7-Eleven operators also changed how they handle cash. Certainly, customers can utilize the pay-at-the-pump features at the dispenser, but in-store, customers are asked to place cash on counters so that hands do not touch. When the sale is complete, staff sanitize the area ahead of the next customer.

Shell is another major that has taken action to safeguard staff and customers. According to Shell Canada spokesperson Kristen Schmidt, the company has installed plexiglass at payment counters, added floor signage to maintain physical distance, and enhanced cleaning procedures. “We also have the Shell app, available in the Apple app store and Google Play store, which includes Shell EasyPay. This is a secure and touchless way for customers to pay for their purchases at the pump or in-store. We recognize that customers may wish to limit interactions at this time and practice safe social distancing, which can easily be accommodated through Shell EasyPay.”

Other Shell initiatives include recommendations laid out by the World Health Organization and the Public Health Authority of Canada. Schmidt points to six key items.

Screen Shot 2020-07-16 at 2.20.06 PM

At Esso and Mobil stations the company worked alongside its independent branded retailers to ensure the customer experience was safe and convenient. Imperial Oil is present in the market with 21 fuel terminals and more than 2000 Esso and Mobil sites across Canada.

Screen Shot 2020-07-16 at 2.19.38 PMAccording to Jon Harding, public affairs advisor, Imperial Oil, Esso and Mobil service station personnel have been tasked to make sure sites in Canada are frequently cleaned and sanitized – from fuel nozzles to store countertops to door handles. “When at the pump, we encourage customers to leverage the mobile payment option through the Speedpass+ app to reduce contact with surfaces.  We also recognize the importance of and, where appropriate, are striving to provide services to essential service providers, such as truck drivers. Specific to cardlock sites, we enhanced our online Esso cardlock locator tool for truckers and made it easier to identify cardlock sites and call ahead for information about facilities.”

Help at hand

Like retailers and fuel distributors, equipment manufacturers have been quick to come forward with much-needed innovation. These products have greatly helped retailers keep up their guard on cleanliness and site performance.

Fixture fabricator Gorrie RCP, a frontline company that designs, develops, and builds tailor-made waste and recycling management products as well as amenity fixtures and merchandising displays, got to work early on a range of personal protection equipment (PPE) for staff at c-store, car wash and gas bar. According to Gorrie’s business development manager, David McLean, the company had to speed up production to meet the sudden demand.

“Normally we take about four weeks to design, engineer and manufacture a product. We cut that down to two weeks. Many of our customers are essential services and we had to get products to them to keep them safe,” says McLean mentioning that face shields were the first offering followed by hand sanitizing stations. “At first people were looking for temporary solutions, but as the challenge grew it could be seen that more permanent solutions were necessary. The COVID-19 crisis is one that will be with us for the next couple of years at least. We are seeing that consumer behaviours have changed and retailers need to offer a higher level of safety to make customers feel secure. Our teams are actively looking at not only what is needed now, but we have to look to the future for products that will be needed tomorrow as well as we continue to face great change in our society.”

Gorrie RCP offers a range of PPE that includes distancing signage, clear plastic partitions, sanitizer gels and hand washing stations as well as masks and face shields.

RTS Retail is another manufacturer that came forward quickly with protective equipment during COVID-19. According to Darren Norley, national accounts manager, RTS Retail, the company has been making protective gear for years before the novel coronavirus made itself known. One example is Citrus Wirx a line that has been helping grocery and convenience shoppers keep carts and baskets virus-free for years. Now, this product is at the front lines during the COVID-19 pandemic. “In the last three months we have seen demand soar for sanitary wipes and other items,” says Norley remarking that sales for things like Citrus Wirx have climbed 700% over the past three months. “We have been able to supply our regular customers with PPE, but even with three factories (Canada, US, China) demand was so great we had to step up production and it was a challenge to fully meet this increase.”

RTS Retail also offers Grab Wirx, a protective glove system that is ideal for gas stations where dispenser and windshield wiper handles can carry COVID-19. Grab Wirx dispenses up to 200 gloves in a touch-free environment. 

“We are seeing sectors such as grocery retail now preparing for future health crisis scenarios similar to the current COVID-19 problem,” says Norley. “They don’t want to get caught empty-handed again without proper PPE.  The cost is small compared to the size of the problem to business.”

McCowan Design and Manufacturing, a Canadian leader in-store fixtures and displays for convenience, gas bar and foodservice as well as a range of other retail environments, quickly added new virus safety-related products to their lineup. Helping staff work safe McCowan now offers acrylic screens for retail and service desk personnel as well as stands and supports for hand sanitizers.

The new hand sanitizer stands can accommodate a variety of hand sanitizer bottle sizes and can be set up as a freestanding or wall-mounted unit. Stands can also handle dispensers or bottles and stands come with the ability to lock sanitizer into place to prevent thefts. The acrylic screens are made using 1/4-inch acrylic sheets and come with a solid metal base. Overall size is 40” X 23” X 12” with a large 8.5” X 12” pass-through.

“The ways that convenience store and gas bars offer safety and protection to their customers tell people volumes about the overall service at hand,” says McCowan VP Anthony Ruffolo. “Having a prominently displayed hand sanitizer during these challenging times is a simple way to tell customers you value their business and you are a responsible community member. It’s not an expensive service add on and it says you care.”

Originally published in the July/August issue of OCTANE. 


Tanker Greenergy_BG Fuels press_2

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.

 


Screen Shot 2020-06-08 at 5.12.34 PM

Oil and gas spending estimates adjusted lower as uncertainties persist

New forecasts show dramatically lower expectations for 2020 capital spending in the oil and gas sector both nationally and in Alberta, the province that produces 65% of the country’s natural gas and 82% of its oil.

The Canadian Association of Petroleum Producers now estimates that $23.3 billion will be spent in the oil and gas production sector in Canada this year, down from about $37 billion in its January forecast.

Producers have announced billions of dollars in budget cuts since the start of the year to cope with lower oil prices as global energy demand plummets due to measures taken to control the COVID-19 pandemic.

Its January prediction represented about a 6% increase over 2019, credited to new industry friendly policies in Alberta and Saskatchewan and growing optimism that export pipeline capacity would be added.

The Alberta Energy Regulator, meanwhile, estimates that oil and gas capital spending in the province this year will fall to between $14.1 billion and $16.4 billion as price uncertainties continue to hurt producer confidence.

In its energy outlook posted Monday, the regulator says capital spending fell by 31% in 2019 to $18.9 billion. It attributed the 2019 drop to uncertainties around energy policy, low energy prices and market access constraints.


Shutterstock

‘Immense amount of pain’ predicted for Canadian oilfield services sector

Shutterstock

Shutterstock

Canada’s oilfield services sector is in for “an immense amount of pain” over at least the next year thanks to low North American oil and gas exploration activity amid a worldwide glut of cheap crude, according to a report from CIBC.

Drilling and well completion companies stand to suffer the most as producers will be reluctant to reverse cuts in spending and production linked to the COVID-19 pandemic and its affect on fuel demand, the analysts warn.

“There is no way to sugarcoat it. The oilfield services sector is in for an immense amount of pain over the balance of 2020 and into 2021,” the report says.

“This will be felt across the sector and while some sub-segments will be more impacted than others (i.e. drilling/completion services lines), no one will be immune, especially with the broad-based shut-ins of existing production.”

On Thursday, Calgary-based STEP Energy Services Ltd. was the latest oilfield service provider to report a series of measures to deal with sharply lower demand that began in mid-March.

The measures include job cuts, wage rollbacks, parked equipment and reduced capital spending in its hydraulic fracturing and coiled tubing well service operations in Canada and the U.S.

It is also seeking relief from its lenders because it could potentially breach its debt-to-adjusted-earnings covenants within the next two quarters, triggering a possible demand for immediate repayment of all amounts due.

“Volatile market conditions have created uncertainty for our clients and they have responded by announcing material reductions in capital expenditures and cancelled work programs,” said STEP in a statement.

“Natural gas prices have strengthened of late which could support additional work later in the year; however, this is not expected to offset the decline in demand for services from oil-directed work.”

In a note, analyst Ian Gillies of Stifle FirstEnergy said STEP’s results were in line with expectations, but the bank covenant warning is worrying for investors.

“The outlook for North American hydraulic fracturing remains extremely challenging due to the material uncertainty surrounding the global economy and crude prices,” he said.

The authors of the CIBC report said the services sector downturn is made worse by expectations of “a prolonged trough” in activity as demand for new oil and gas production is delayed by the need to draw down crude storage and as idled wells are reactivated.

It said shares in the services companies it covers are down between 15 and 70% since early March, some of which is justified by the cost of challenges to come, but some due to “indiscriminate selling” by spooked investors.

Ongoing equipment retirements are expected to allow the North American services sector to eventually match capacity with demand, it said.

At STEP, adjusted earnings before interest, taxes, depreciation and amortization fell by 12% to $22.8 million in the three months ended March 31, despite a 10% increase in consolidated revenue to $194 million.

It attributed the decrease to a $2.5 million provision for bad debt and $1.9 million in severance for unspecified workforce reductions in Canada and the United States.

Despite a recent rise in U.S. benchmark oil prices to above US$30 per barrel, STEP says it has further reduced its 2020 capital program to $15.5 million, down from $24 million previously and its initial plan of $47 million.

It reported a first-quarter net loss of $52.2 million, compared with a net loss of $600,000 for the same period in 2019, mainly due to $58.8 million in non-cash impairment charges against its Canadian well-fracturing assets.

Earlier this month, the PetroLMI Division of Energy Safety Canada reported more than 7,700 oil and gas sector jobs were lost in April compared with March, with 6,500 of the lost jobs from the oilfield services sector.

 


Screen Shot 2019-09-17 at 3.50.39 PM

Imperial Oil reports $188M loss as COVID-19 hits workers, slows work schedule

Screen Shot 2019-09-17 at 3.50.39 PM

CEO Brad Corson

Imperial Oil Ltd. is slowing or deferring maintenance work throughout its operations as it tries to ensure employee safety in the wake of a COVID-19 outbreak that has infected 83 workers at its Kearl oilsands mine in northern Alberta.

The Calgary-based company said Friday it will start a planned one-month maintenance shutdown of one of its two production trains at Kearl in a few days and extend it by an extra month to late June or early July to allow more distancing between workers.

The extension means production at Kearl will fall from the record average of 226,000 barrels per day in the first quarter – and 238,000 bpd in March – to about 150,000 bpd in the second quarter, CEO Brad Corson told a conference call on Friday.

“This allows us to progress at a more measured pace and greatly reduce the number of people we have working at site at any given time and without affecting the overall scope,” he said.

“It also allows us to complete the work at a time of likely low prices so we can have the asset fully up and running as and when prices recover.”

He said the company has also reduced the scope of maintenance at its Sarnia, Ont., refinery, will defer planned work at its Sarnia chemical plant and is postponing planned maintenance at its Nanicoke, Ont., and Strathcona (Edmonton) refineries until after this year.

Twenty-two of the Kearl workers stricken with the coronavirus have recovered and the others are being monitored or treated as necessary, Corson said.

Work at the project is continuing with enhanced physical distancing, cleaning and health screening, along with supplying face masks and moving fewer workers on transport airplanes and buses.

Kearl is owned by Imperial at 71% and its parent company, ExxonMobil, with 29%.

The record output at Kearl thanks to the introduction of supplemental ore crushers drove overall Imperial production to about 419,000 barrels of oil equivalent per day in the first three months of 2020, up from 388,000 boe/d in the same period last year.

Record throughput at its Strathcona refinery helped take its overall processing total to 383,000 barrels per day, the same as a year ago.

Corson said demand for jet fuel and gasoline fell significantly in March, while diesel demand dropped by a more moderate amount, due to measures taken to limit the pandemic. However, there are signs demand may be slowly recovering, he added.

Imperial reported a net loss of $188 million in the first quarter due to lower commodity prices and non-cash charges of $301 million, with $281 million of that due to a reduction in the value of its inventory as crude oil prices plunged in March and $20 million from a goodwill impairment.

It had a net profit of $293 million in the same quarter last year.

Fellow oilsands producers Husky Energy Inc. and Cenovus Energy Inc. both reported writedowns and losses earlier this week.

Imperial’s revenue and other income totalled $6.69 billion in the quarter, down from $7.98 billion in the first quarter of 2019.

Imperial’s average realized bitumen price averaged $18.08 per barrel in the first quarter of 2020, compared to $48.85 per barrel in the first quarter of 2019.

Crude-by-rail shipments averaged 97,000 bpd from its co-owned Edmonton rail terminal in the first quarter of 2020, up from 53,000 bpd in the fourth quarter of 2019.

Shipments by rail fell to about 10,000 bpd in April and are being phased out as pipeline space is freed up amid industry-wide production cutbacks due to current low oil prices, said Corson.

Analysts said Imperial beat their expectations on production and on cash flow, the latter thanks to higher profits from its refining and marketing sector.

Imperial cut its 2020 capital spending plan at the end of March by $500 million to between $1.1 billion and $1.2 billion and targeted a reduction in expenses by $500 million compared with 2019 levels in an effort to deal with impact of the pandemic.

 


shutterstock_692687404

Gas retailers in Atlantic Canada forced to sell fuel at a loss

shutterstock_692687404Retailers in Atlantic Canada are struggling under the one-two punch of reduced business due to COVID-19 and gas price regulations.

Retail gasoline pricing is the region is unique to the rest of the country, as gas prices are regulated.

“Regulation is supposed to reduce price volatility, but in March when the economic effects of the COVID-19 pandemic coupled with the dire effects of the global oil price war between Russia and Saudi Arabia, the result was a rapid decrease in the regulated selling price of motor fuel,” the Convenience Industry Council of Canada said in a release. “As a result of steadily decreasing consumer demand, many retailers were carrying significant inventory. Each time the price of fuel was adjusted, the future for our retailers became yet more uncertain as the difference between the posted regulated price to consumers and the product cost to retailers continued to grow.”

In essence, Atlantic gas retailers were burdened with inventory that they purchased at a price much higher than what they could sell it for.

It’s estimated that Atlantic convenience gas stations are losing upwards of $14 and more on every fill up, or 20-25 cents per litre, until they could clear their inventory, according to CICC. “The total loss on fuel to each retailer in March was in the tens of thousands of dollars, on average. These are real losses because there is no pent up or deferred demand that can or will be made up down the road.”

While area retailers are accustomed to ups and downs throughout the year due to supply and pricing, it typically evens out in the end. However, more recent losses are unprecedented and represent a huge financial burden.

“We know many convenience gas retailers may not be able to absorb that financial hit and without help there could be business closures,” said CICC.

The industry association is working with CIPMA and the Atlantic Convenience Stores  Association to discuss the issue with provincial governments in the Atlantic region and come up with potential solutions that will help the nearly 2,500 convenience stores in the Atlantic region that sell gasoline.