B.C. flooding will result in products not getting to market and higher prices: Economist
CALGARY - While British Columbians in flood-affected communities continue to see lineups and sporadic outages at gas stations, experts say the province is not in any immediate danger of running out of fuel.
However, in the longer-term, B.C.'s gasoline supply is dependent on the resumption of operations of the Trans Mountain pipeline, which has been idled since Sunday as a precautionary measure due to flooding and extreme weather in parts of the province where it operates.
In the days since floods and washouts damaged rail lines and highways and severed access from parts of B.C. to the rest of the country, residents of the Western-most province have experienced long lines and in some cases a complete lack of product at gas stations in some communities.
“Petroleum retailers are experiencing challenges obtaining stable fuel supply,'' said B.C.-based Peninsula Co-op on its website. “We are working hard to mitigate the outages but expect it will take several days to stabilize.''
The Saanich Police Department said on social media Thursday that gas station lineups in the greater Victoria area were causing traffic disruptions to the point that B.C. Transit was having to divert its buses to alternate routes.
But Vijay Muralidharan - Calgary-based director of consulting with Kalibrate, formerly Kent Group Ltd. - said these issues are not the result of the pipeline shutdown or a lack of overall fuel supply in the province. While 40 per cent of B.C.'s gasoline arrives in the province as a refined product from Alberta through the Trans Mountain pipeline, B.C. also produces its own gasoline at a refinery in Burnaby owned by Parkland Corporation.
B.C. also imports gasoline from Washington state, he said.
“There is supply coming in,'' Muralidharan said, adding the interruptions at gas stations are instead the result of trucks having difficulties navigating flood-affected highways, and should be temporary. While the timeline for reopening some of the major trucking routes, such as the Coquihalla, is unknown, others should be passable sooner. The B.C. Department of Transportation said it hoped to have Highway 7, for example, open for traffic between Hope and Aggasiz by the end of Thursday.
“There will be some supply interruptions for a few days but the floodwaters are already receding in parts of B.C., so I think you're going to see some reprieve soon as the trucks start to move,'' Muralidharan said.
Muralidharan added the Burnaby refinery typically has at least two weeks' supply of crude oil in storage, so it can use its own stocks to maintain refinery operations in the immediate future. But in the longer-term, he said, it will be vital to get Trans Mountain back up and running.
“The big question is going to be how long is the pipeline going to be shut down,'' he said.
Parkland Corp. spokeswoman Larissa Mark said in an email that the Burnaby refinery is operating and the company is “effectively managing'' its inventories of crude and other products.
“The broader supply chain for essential fuels is resilient and if needed, we have some optionality and contingencies to import fuel from the Pacific Northwest into the Lower Mainland,'' Mark said. “We are monitoring the temporary shutdown of the Trans Mountain pipeline and rail disruption closely.''
In a statement posted on its website Thursday, Trans Mountain Corp. - the Crown corporation which operates the federally owned pipeline - said every effort is being made to safely restart the pipeline as promptly as possible.
“Trans Mountain is in regular contact with its shippers and is working to mitigate potential impacts of the pipeline shut down on the region,'' the statement said.
According to the company, there has been no indication of any oil release from the pipeline and it remains “safely in a static condition.'' However, the company said there are areas where it will need to restore cover over the pipe or make other repairs to ensure integrity of the line where it has been exposed due to flooding. Right now, access to some areas is still hampered by debris and washed-out roads and bridges.
Suncor Energy Inc., which owns the Petro-Canada brand of retail gas stations, said Thursday it is not experiencing any significant supply impacts in B.C. due to the extreme weather situation.
“However, a few Petro-Canada locations have been closed and we are currently unable to service others as a result of road closures in areas directly impacted by the weather,'' said Suncor spokesman Leith Slade. “We will continue to monitor the situation over the coming days and we will look to reopen and resume service to all affected sites as quickly as possible.''