Energy experts debate B.C’s rising fuel costs

Laurie Tritschler, with files from Mohak Sood / May 1, 2019

A Burnaby Shell station advertises record-setting gas-prices.
(Cole Sorenson / BCIT News)

Drivers saw the price of gasoline climb slightly above $1.70/liter at some lower mainland pumps today. With prices expected to rise, electric vehicles would seem to point the way forward, but there’s always a rub.

Speaking between appearances at a San Diego conference on emergency preparedness, fuel economy pundit Dan McTeague offered his perspective on a gathering crisis here in British Columbia.

McTeague is the chief Canadian analyst at Gasbuddy.com, a website people in the lower mainland use to find cheap gas and to understand why prices are spiking at B.C. pumps.

“The only solution that we have is to bring in more product [i.e., refined gas] that could be potentially cheaper from Edmonton,” says McTeague, adding Victoria “is in complete, total denial” that at some point the Federal government will have to expand the Trans Mountain Pipeline Canadian tax-payers recently acquired from the energy giant Kinder Morgan.

“The only solution that we have is to bring in more product [i.e., refined gas] that could be potentially cheaper from Edmonton.” – Dan McTeague, Gasbuddy.com

The problem, McTeague insists, is fundamentally one of supply rather than higher consumer prices. Beginning with international factors, McTeague notes the North American fuel economy is largely based on industry output and consumer demand in the United States, where McTeague notes, “[g]asoline prices are reaching all-time highs in California [and] Oregon—all over the Pacific Northwest.”

With these states importing refined gas, fuel stations in B.C. are having to pay heavier prices to attract global suppliers. At this time last year, McTeague remembers the province was importing gas from as far away as Indonesia, Singapore, and the Netherlands.

According to McTeague, B.C. consumers use roughly 190,000 barrels of gas every day (bpd). Operating at capacity, Burnaby’s Parkland refinery produces only 55,000 bpd. McTeague says Western Canada’s three other oil refineries can meet British Columbians’ demand for gas, attributing the shortfall to a lack of political will and bad policy from B.C’s NDP-Green coalition government.

Dan McTeague attributes the high cost of gas in B.C. to a lack of supply.
(Twitter / @GasBuddyDan)

It’s mostly the cost of refined gasoline that determines what drivers pay at the pump, with 25% of consumer prices coming from federal and provincial.
(Mohak Sood / BCIT News)

Premier John Horgan has recently called on B.C. newspaper mogul David Black to invest in another coastal refinery, but McTeague says the province is a “no-go zone” for investors having “anything to do with fossil fuels.” McTeague faults Horgan’s B.C’s Clean Energy Act, which he says aims to eliminate gas-burning cars in the province by 2040. Meanwhile, he points out the Parkland refinery is too small to expand production and lacks the necessary access to Albertan oil even if it were big enough.

Marc Lee of the Canadian Centre for Policy Alternatives disagrees. Lee says McTeague’s prescriptions would merely benefit Alberta’s oil and gas sector, and especially American refineries Lee says are unduly profiting off British Columbians. To this point, Lee notes the Trans Mountain Pipeline overwhelmingly delivers crude oil to the US, with a portion of refined gas returning at exorbitant prices. Lee describes these inflated profits as “a hidden carbon tax” at B.C. pumps, arguing that giving more capacity to refined gas for domestic consumption would make it unnecessary to expand the pipeline altogether.

With McTeague predicting gas prices will exceed $1.70/liter by next week, the infographic below illustrates how much cheaper it is to fuel electric cars. But a study published earlier this month by Germany’s Center for Economic Studies finds that on top of their much higher price tags, electric cars “are not a panacea for climate change.”

Lee and Professor Werner Antweiler at the University of British Columbia’s Sauder School of Business say the study’s findings only go as far as the electricity used by plug-in cars. Antweiler, who holds a Ph.D. in environmental economics, says he “look[s] at where electricity comes from when it comes to the narrative of electric cars,” noting power-grids along the Pacific Coast are overwhelmingly supplied by local hydro-electric dams which don’t emit greenhouse gases. Lee concurs, claiming 97% of B.C’s energy comes from this clean, renewable source.

Antweiler is more concerned about the environmental damages from electric car manufacturing, saying these “upstream emissions” stem from the vehicles’ lithium-ion batteries. Anweiler elaborates that lithium-mining pollutes nearby watersheds and poses significant health-risks to miners.

A federal government rebate is available to Canadians purchasing e-cars as of May 1st. Meanwhile, B.C. and Alberta remain at loggerheads over the proposed expansion to the Trans Mountain Pipeline.