Gas Prices

[WestCoastEcho]

Originally Posted by WarrenC12

That's some grade-A bullshit. They are redefining the economic concept of margin now?

Because margin =/= profit. It is merely the difference between the costs of the raw material used as input versus the finished goods.

In that margin, a company has to cover the cost of property, maintenance, taxes, salaries, financing costs, other inputs (such as catalysts and natural gas), etc.

So, you could have a situation where you have a $20 margin per barrel, but if your costs are $18 per barrel to produce and sell the gas, your actual profit is $2 a barrel, not $20. Don't know why this needs to be explained to you.

In the case of refined fuel, if you actually bothered to read Parkland's response, for example, they point out that the LCFS requirement to blend in ethanol significantly adds to the cost to a finished tank as gas as ethanol is now significantly much more expensive than the cost of of the raw crude oil used to produce the gasoline (currently, ethanol is trading at $1.531 USD per gallon, which is equal to $64 dollars per barrel).

Furthermore, to achieve the energy output and octane levels that would be equal to just pure oil, given that ethanol has 67% of the energy content of a barrel of oil, you are looking at a cost per barrel equal to $96.453 dollars per barrel for ethanol. Compare that to the benchmark WTI crude price of $57.49 a barrel.

Originally Posted by WarrenC12

But we're told TM is over subscribed and there are refineries in Alberta that can't send their cheaper gasoline to us, which would lower prices.

See below regarding non-traditional suppliers entering the market.

Originally Posted by WarrenC12

More bullshit. Refineries were closed in BC and we're constantly told how a new refinery doesn't make any economic sense because they are so capital intensive. That's textbook barrier to entry.

You're not reading the document. Parkland is clearly saying that there is a growing industry of smaller players bringing fuel into BC, primarily from Alberta in smaller quantities, low enough that they don't meet the threshold necessary to trigger compliance with BC's LCFS via non-traditional distribution methods:


(page 33 of Parkland's response)

High barriers to entry for fuel supply would mean few, large players in the industry delivering fuel across BC, not many small operations.

[WestCoastEcho]

Originally Posted by WarrenC12

Do you ever get tired of shilling for these oil and gas companies?

If there's nothing to hide, why aren't they being more forthcoming? If it's all taxes and regulations, show us the fucking math!

Because, that's commercially very sensitive information, and if that information got out, and a competitor sees it, that competitor could instantly try to undercut them to seize market share, not just here in BC, but elsewhere!

And there's no guarantee that the BCUC can keep the information that is supplied to them private, which would be disastrous to the company that had its information leaked; imagine the sort of damage that could be done to, say, Shell, who's information got leaked out and ended up in their competitor's hands, whom then proceeds to attack Shell around the world by undercutting their margins.

Remember, there's other players that sell refined fuel into BC but don't have a physical presence here in Canada; for example, BP, Philips 66, and Tesoro all have refineries in neighbouring Washington State, and they all sell fuel into BC, and have operations elsewhere around the world. With such large facilities, it's easy to see why Parkland, Suncor, and Shell might not want commercially sensitive information falling into the wrong hands, especially to those three gigantic players in the oil refinery business.

And it is not just oil refineries that keep this sort of stuff private; it's other industries as well. Does Apple tell everyone about the cost to actually produce an iPhone? How about Samsung? or LG? Again, everyone keeps such information a secret because they know that if their competitor sees the information, it could spell disaster.

[VancouverOfTheFuture]

wowza this thread as gone crazy recently eh? haha. i saw it up around 150.9 again in Vancouver/Richmond though. seems like prices have gone up.

[WarrenC12]

Originally Posted by WestCoastEcho

And it is not just oil refineries that keep this sort of stuff private; it's other industries as well. Does Apple tell everyone about the cost to actually produce an iPhone? How about Samsung? or LG? Again, everyone keeps such information a secret because they know that if their competitor sees the information, it could spell disaster.

LOL what a stupid comparison.

Oil and gas are commodities, cell phones are not.

You're really bending over backwards to defend these companies who have been ripping off consumers and pointing the finger at governments for decades.

[logan5]

Toyota is testing solar power on its Prius Hybrid plug in. Toyota claims these solar panels have a 34% efficiency. With these solar panels charging the battery (in ideal conditions), you would get 44.5 km's of extra range per day. Even if you get 10 km's per day, that would be a big boost, but I'm not sure I believe these numbers.

https://www.theverge.com/2019/7/5/206831...oof-range-electricity-energy-environment

[WarrenC12]

Originally Posted by logan5

Toyota is testing solar power on its Prius Hybrid plug in. Toyota claims these solar panels have a 34% efficiency. With these solar panels charging the battery (in ideal conditions), you would get 44.5 km's of extra range per day. Even if you get 10 km's per day, that would be a big boost, but I'm not sure I believe these numbers.

https://www.theverge.com/2019/7/5/206831...oof-range-electricity-energy-environment

Silly idea. If you have panels that efficient, that's great. Put them on your house.

[WestCoastEcho]

Originally Posted by WarrenC12

LOL what a stupid comparison.

Oil and gas are commodities, cell phones are not.

You're really bending over backwards to defend these companies who have been ripping off consumers and pointing the finger at governments for decades.

Cell phones ARE a commodity; with how similar most cell phones are to each other at the same price bracket, most people won't notice that one were to switch the phone in their hands from a Samsung to a LG, or a Sony.

And your allegations that gas companies are ripping off consumers doesn't fly when there no clear evidence to support said allegations (and all indications from most economists is that it is in fact government policy that's to blame for high gas prices). Especially when you look at the wholesale rack price of gas compared to other jurisdictions along the entire Pacific Northwest:


(Dr. Kahwaty's report, page 52)

And compared to other American jurisdictions:

(Dr. Kahwaty's report, page 53)

Also, as Parkland has indicated in their filing, profit margins have actually decreased since 2015, not increased. You'd think that if gas companies were price gouging, their profit margins should be shooting straight up, but it isn't; it's going the other way:


(page 6 of Parkland's submission)

Obviously, they are price gouging; they are making less money as profit as a percentage of the price than before!

[WestCoastEcho]

As a reminder, our fuel supply and pricing is greatly influenced by what's going on in the US, specifically the pricing within PADD 5, or the US West Coast. The EIA has divided up the entire USA into 5 geographical regions, with the entire US West Coast in PADD 5:


(Source: US EIA: https://www.eia.gov/todayinenergy/detail.php?id=4890)

PADD 5 is geographically isolated from the remainder of the US, with very little inter-connectivity, beyond what can be sent via rail or ship:


(Source US EIA: https://www.eia.gov/state/maps.php)

(Source: US EIA: https://www.eia.gov/analysis/transportationfuels/padd5/)

Due to our supply gap from both local refineries and from Alberta, we must supplement our supply of refined product, primarily from PADD 5. However, as PADD 5 is so geographically isolated from the rest of the refining centres in the US, it is the highest cost region to import fuel in from. As such, our prices fall in line, and are affected by events that happen within PADD 5 that could cause a supply disruption, such as a refinery fire or explosion.

As Dr. Kahwaty notes in the regional assessment for PADD 5 and it's implications for us in BC:

(Dr. Kahwaty's report, page 50 and 51)

That's why when there was that series of refinery shutdowns in California earlier this year, primarily due to fires or explosions, gas prices along the entire North American Pacific Coast spiked; everyone was scrambling to secure fuel, even going so far as to import fuel via tanker from Texas and Asia to meet local demand.

[logan5]

Originally Posted by WarrenC12

Silly idea. If you have panels that efficient, that's great. Put them on your house.

I think it's worth trying. Vancouver has a lot of apartment dwellers that won't have solar power at their disposal. If it works as advertised and you just drive to and from work everyday like most people do, a good percentage of your charging needs would be covered.

If you can get 40km of charge per sunny day, there will be months in Vancouver where you wouldn't even have to plug your car in. Obviously places like California and other sunny states would benefit even more.

[Sheba]

Originally Posted by logan5

I think it's worth trying. Vancouver has a lot of apartment dwellers that won't have solar power at their disposal. If it works as advertised and you just drive to and from work everyday like most people do, a good percentage of your charging needs would be covered.

Exactly. I'm in an older building and the cost to retrofit electric charging to all the parking stalls is insanely expensive. We're looking to set it up in one or two of the guest parking stalls but I suspect it could take a couple years before it happens.

Likewise with solar. There's no solar here and no current plans for it. Even if someone proposed it and got enough people to agree to push it through, it would still be a couple years before it happens.

Meanwhile adding some solar panels to your car would take how long... ?

[VancouverOfTheFuture]

i think adding solar panels to the roof would be a good idea. if it proves a benefit i don't see why you wouldn't? what are the downsides?

this is assuming the extra weight required causes it to be pointless. i assume they would weigh more on the roof than a metal roof on a car, plus possible structure upgrades. though i don't have that info, still something to consider.

[WarrenC12]

Originally Posted by logan5

I think it's worth trying. Vancouver has a lot of apartment dwellers that won't have solar power at their disposal. If it works as advertised and you just drive to and from work everyday like most people do, a good percentage of your charging needs would be covered.

If you can get 40km of charge per sunny day, there will be months in Vancouver where you wouldn't even have to plug your car in. Obviously places like California and other sunny states would benefit even more.

So you want an apartment dweller who parks underground 16 hours a day, to pay a premium to have high efficiency solar power on the roof of their vehicle.

[Trainguy]

So basically you are saying that Padd 5 is getting a raw deal simply because:

( 1 ) we are land locked away from large oil supplies like in Texas and Alberta with limited means to transport it to Padd 5.

( 2 ) our local and fed governments have used large gas taxes to fund their budgets.

It is hard to trust the gasoline market when retail prices fluctuate and shift so often. There are also huge price differences between retailers not far from each other, sometimes 30 cents apart.

[WarrenC12]

Originally Posted by Trainguy

It is hard to trust the gasoline market when retail prices fluctuate and shift so often. There are also huge price differences between retailers not far from each other, sometimes 30 cents apart.

Yes, the charts above show 4-6% margin on gasoline, which is less than the level of daily price fluctuations.

[WestCoastEcho]

Originally Posted by Trainguy

So basically you are saying that Padd 5 is getting a raw deal simply because:

( 1 ) we are land locked away from large oil supplies like in Texas and Alberta with limited means to transport it to Padd 5.

( 2 ) our local and fed governments have used large gas taxes to fund their budgets.

It is hard to trust the gasoline market when retail prices fluctuate and shift so often. There are also huge price differences between retailers not far from each other, sometimes 30 cents apart.

Correct. That's why a lot of focus is on Trans Mountain; because the expansion will move the heavy crude off the existing pipeline and onto a separate pipeline, it frees up the existing pipeline for refined products coming in from Alberta.

On top of that, it also creates more room for lighter crude grades for local refineries (so they don't have to pay a premium to buy someone else's allocation, or to bring in their crude via rail), and with the expanded Sumas pipeline going to Washington State, it means Washington State refineries can get more Canadian crude to replace the need to rail in crude from the US Midwest.

What's being pointed out via taxes is that yes, governments are using gas taxes as a way to fill the coffers, and some of the costs created by government policies on 'low carbon fuel' may not make sense compared to just a straight carbon tax.

For example, blending ethanol into gas is an extremely expensive proposition; ethanol isn't cheap when regular crude sells for just under $60 USD a barrel. It made more sense when crude was seeing prices at over $120 USD a barrel, but not now (beyond the fact that we are using arable land for food production to produce fuel).

And on variances at the gas bar; it can be as simple as different gas bars deciding on trying to grab market share by selling fuel at cost, or even under cost (and hoping ancillary revenue from convenience store or car washes makes up for it), or when they bought the fuel; on different days, the rack price can differ, and sometimes, a gas bar gets stuck with a shipment of fuel bought at a higher price than their neighbours, and thus they have to try to break even on that.

[logan5]

Originally Posted by WarrenC12

So you want an apartment dweller who parks underground 16 hours a day, to pay a premium to have high efficiency solar power on the roof of their vehicle.

Obviously not everybody would get the full benefit, but there are hundreds of thousands of cars in Metro Vancouver that are parked outside all day. Even if your vehicle is outside for an hour or 2 everyday, you would still get some benefit from it, as long as it's a low cost option.

The installation cost per watt in B.C. is $2.52 - $2.77, according to this website. It might cheap enough for car manufacturers to make it standard.

Like I said, it's something worth at least exploring. Toyota thinks it's worth trying out.

[Alex Mackinnon]

I think we've hit the era of "good enough" BEVs.

A group of people managed to drive a Tesla Model 3 2,871km in 24 hours

[WarrenC12]

Originally Posted by logan5

Obviously not everybody would get the full benefit, but there are hundreds of thousands of cars in Metro Vancouver that are parked outside all day. Even if your vehicle is outside for an hour or 2 everyday, you would still get some benefit from it, as long as it's a low cost option.

The installation cost per watt in B.C. is $2.52 - $2.77, according to this website. It might cheap enough for car manufacturers to make it standard.

Like I said, it's something worth at least exploring. Toyota thinks it's worth trying out.

I'm not denying it's interesting, but if those levels of efficiency are possible (probably at much higher cost per watt), it would make far more sense to apply them to rooftops that are outdoors 24/7.

[WarrenC12]

Originally Posted by Alex Mackinnon

I think we've hit the era of "good enough" BEVs.

A group of people managed to drive a Tesla Model 3 2,871km in 24 hours

The best argument against range anxiety and some notion that BEVs aren't good enough is to actually drive one for a period of time.

A tough ask for a $50k car, but maybe Tesla should start renting them by the week, especially from the used inventory they might start to accumulate.

[Migrant_Coconut]

Originally Posted by logan5

Obviously not everybody would get the full benefit, but there are hundreds of thousands of cars in Metro Vancouver that are parked outside all day. Even if your vehicle is outside for an hour or 2 everyday, you would still get some benefit from it, as long as it's a low cost option.

Don't most people like to park in the shade, though?

Originally Posted by WarrenC12

I'm not denying it's interesting, but if those levels of efficiency are possible (probably at much higher cost per watt), it would make far more sense to apply them to rooftops that are outdoors 24/7.

I do agree somewhat with the apartment argument - the average Tesla needs about ten solar panels, and one roof isn't going to fit ten panels for every resident. Unless some would be drilled into the south wall?