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Fuelling the future

Could Europe’s fuel mix be a roadmap for Canada?
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Here in Canada, we’re ridiculously spoiled in terms of natural resources. According to statistics from the end of 2021, our country ranks fourth in the world—behind only Russia, the United States and Saudi Arabia—with US $33.2 trillion in natural resource value.

The rest of the top-10? In descending order, there’s Iran in fifth, followed by China, Brazil, Australia, Iraq and Venezuela. From the perspective of political stability, it’s almost like the rogues’ gallery of nations. Or maybe the axis of gasses.

What statistics like these reveal is that—by default—strong, democratic countries such as Canada bear the responsibility of fuelling the planet, in case things go sideways in any of the other top-10 countries. Like political instability in Brazil, Iran, Venezuela or Iraq. Or like Russia deciding to invade another sovereign nation.

As a result of Putin’s errant decision to make war with Ukraine, the flow of oil around the world has completely changed. At the end of January 2022, most of the oil imported to the European Union, 31%, came from Russia; by the end of the year, the United States had taken over the top spot as the biggest exporter of oil to the EU.

The EU has also turned to America and other nations for their natural gas. The Russian share of natural gas imports to Europe was 31% in the first quarter of 2022 but has since fallen off a cliff. Norway is now the biggest supplier of natural gas to the EU, followed closely by the United States.

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What this means for Canada is that our leaders need to accept the responsibility for governing our vast natural resources and developing them in an environmentally responsible way. This is an end goal that’s good for Canada and good for our democratic allies around the world. It’s also important to balance or tip the scales, depending on your perspective, edging democratic nations ahead of countries that embrace some tinpot dictator.  

Returning focus to the European Union, it’s an interesting market to consider. It’s clearly dependent on foreign sources of fuel and it’s also transitioning to alternative fuels faster than in many other parts of the world, including North America. So, the trajectory of fuel usage in the EU could indicate where things are headed over here within the next five years or so. 

As we went to press, the EU walked back part of its plan to ban sales of all new internal combustion engine (ICE) vehicles starting in 2035. A last-minute carve-out appeared in the form of ICE vehicles that run on carbon-neutral fuels, also known as e-fuels, which we covered in a previous issue of OCTANE.

This late revision was championed by Germany, no surprise given that three key manufacturers of high-performance cars are BMW, Mercedes-Benz and Porsche. An earlier carve-out also allows niche manufacturers that produce fewer than 1,000 vehicles per year to be powered by petroleum products.

But the writing was already on the wall, so many European consumers have already abandoned ICE vehicles. From April to June 2022, combined sales of gasoline and diesel passenger cars went from 62.0% market share to 55.8%. That’s a huge drop-off.

In this same quarter, battery electric vehicles (BEVs) accounted for 9.9% of total passenger car sales, while plug-in hybrids (PHEVs) captured 8.7% of the market. Sales of vehicles powered by compressed natural gas (CNG) plunged by 62.9% across the EU, while another alternative fuel source, liquefied petroleum gas (LPG) grew by 7.9%.

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 Both CNG and LPG are cleaner-burning fuels than gasoline or diesel, so they’re better for the environment and the air we breathe. CNG is less expensive than LPG per litre, but LPG has higher energy density.

Here in Canada, the Department of Natural Resources recently announced it was investing $6 million to install six CNG refuelling stations at existing locations along the Trans-Canada Highway. With the addition of these new stations, there will be a total of 40 CNG refuelling stations in the country. 

By contrast, LPG refuelling stations are more plentiful than CNG stations— in fact, there are 617 locations already up and running. This fact gives LPG a significant advantage over all other sources of alternative fuel in terms of infrastructure. Widespread adoption of, for example, hydrogen-powered vehicles or EVs is limited by infrastructure, at least for the time being. 

In the near term, there’s much to learn from the current situation in Europe. The increasing interest in electrification. The rapid break from relying on Russia for petroleum products. The continued push for alternative sources of fuel, such as CNG, LPG and e-fuel.

As a country blessed with tremendous natural resources, it’s our job to provide friendly nations with support for their own transportation needs, while still mapping out the best path forward for Canadians.

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