The Oil Drum

5 comments on The Round-Up: March 2nd 2007

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HeIsSoFly on March 2, 2007 - 2:45pm

Gas chaos reveals volatility

The chaos in the aftermath of a fire at a small southern Ontario oil refinery highlights yet again the volatility of gasoline supply in North America.

Scores of gas stations continue to close across the country's most populous province as suppliers struggle to keep up with demand. The real issue, observers say, is that refining capacity is so strapped in North America it leaves very little room for disruption in the supply chain.

It was a little more than a year and half ago the issue was thrust in front of consumers as Hurricane Katrina sent pump prices soaring across the continent by knocking out 40% of the Gulf Coast's oil-refining capacity. But as pump prices subsided, so, too, did public concern.

Central Canada, however, was sent its wake up call by the fire at a relatively small Imperial Oil refinery on Feb. 15 in Nanticoke, Ont., which resulted in the closure of dozens of gas stations across Ontario and Quebec, sending pump prices up 17% in Toronto.

The situation was exacerbated by winter weather, a rail strike, and minor disruptions at a refinery in Quebec.

"My fear is we've hit the wall -- in other words, we've hit the point where the whole system is out of fuel," Jane Savage, president of Canadian Independent Petroleum Marketers Association, said yesterday about the situation in Ontario after wholesale gasoline sales were cut back to many of her members. "What it highlights is that our supply infrastructure, and in fact all fuel supplies in Ontario, are extremely vulnerable."

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porsena on March 3, 2007 - 8:56pm

TILMA is a bit worrying - another context for lawyers. Here's a possible out for BC's energy plan:

1. A Party may adopt or maintain a measure that is inconsistent with Articles 3, 4 or 5, or Part II(C) provided that the Party can demonstrate that:
a) the purpose of the measure is to achieve a legitimate objective;
b) the measure is not more restrictive to trade, investment or labour mobility than necessary to achieve that legitimate objective; and
c) the measure is not a disguised restriction to trade, investment or labour mobility.

but

3. No Party shall prohibit or restrict an investment or the import of any good or service from the other Party or the export of any good or service to the other Party for a legitimate objective unless the restriction on investment or the import of the like good or service from all non-Parties or the export of the like good or services to all non-Parties is similarly prohibited or restricted.

TILMA aside, I'm sceptical about BC's ability to maintain separate emissions standards for motor vehicles, as was promised. The AirCare stations in the Lower Mainland, BC's only emissions testing capability, are being eliminated. Several BC dealers have a healthy import business with the mostly northwestern US at the moment in used cars and trucks but, of course, some come from Alberta. I guess it could be done at the cost of yet another small layer on the administrative system.