Alberta’s oil refineries in Upgrader Alley are operating at maximum capacity. As refineries are pushed to the max, the opportunity cost of a maintenance shutdown skyrockets. Furthermore, it’s becoming more difficult to find maintenance workers in today’s tight labour market.
Thus, we expect to see more fires, more problems and more supply chain disruptions leading to fuel shortages for motorists.
Above: The Night Scotford Burned
CALGARY - Gasoline and diesel supplies in Western Canada will get even tighter as a second of three Alberta refineries reported reduced output Thursday.
The 98,000 barrel-a-day Scotford refinery had to cut back production due to unplanned maintenance at the adjacent Scotford upgrader, operator Royal Dutch Shell PLC told the Herald.
Back in November, Flying J diesel outlets ran out of agricultural diesel, due to a refinery fire at Shell Scotford. At about that time, I saw fuel shortages at Petro-Canada stations, which went largely ignored by the press.
Now, it’s hitting ESSO:
A mysterious problem at Imperial Oil’s Strathcona County refinery continued Friday, choking off gas supply to Esso stations across Western Canada for the second day in a row.
In addition to several local service stations, fuel shortages have also been reported at Esso stations in B.C., Saskatchewan and Manitoba.
“Nothing has changed. We’re still working on addressing the issue and fuel shortages will be sporadic,” Imperial spokesman Gordon Wong said Friday.
Imperial - Canada’s biggest oil producer and refinery - has been reducing the amount of fuel sent to its retailers since Feb. 24.
Friday Wong again declined to offer any details on the nature of the problems at the refinery.
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{ 2 comments… read them below or add one }
islandgrovepress 03.10.08 at 2:34 am
I opine this might be all “pokin’ the puppy” so as to make excuses for the rise in gas prices at the pump.
mk braaten 03.12.08 at 12:54 pm
Increased fuel costs is a paradox for enviromentalists, in the following two ways:
High costs of oil/gas reduce the consumption of electricity by a small amount (due its economic inelasticity), and thus contributes to an overall reduction in C02.
However, every time the price of oil increases per barrell, it increases the amount of oil that is accessible in the world. For example, if the price of oil goes to $150/barrell, then that means its now economicaly possible to dig deeper, farther, etc, to get the oil that was not economically viable when it was $100/barrell.
So while the higher price of gas reduces consumption and by extension greenhouse gases, the higher price also increases global reserves of oil which are economical to mine/drill for.
At a certain point it must balance out at an equilibrium and we will have an optimal consumption to availiable reserves ratio. Once that occurs, greenhouse gases as well as price per barrel should stablize.