Canada: Gas shortage fears grow

[P & CA News Bot]

Roads across Ontario will become parking lots unless something is done to alleviate a growing fuel shortage that has already caused the closure of scores of service stations, a senior executive at the Ontario Trucking Association is warning.
As of last night the problem had spilled over into Quebec, with at least 10 stations closing down, according to the newspaper La Presse.

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[Fredfredson]

The article for the record.

Gas shortage fears grow

Trucks could be stranded on highways

John Greenwood, National Post, with files from Jon Harding and Nick Van Praet
Published: Tuesday, February 27, 2007

http://www.canada.com/nationalpost/f...d2f9c4&k=97363

Roads across Ontario will become parking lots unless something is done to alleviate a growing fuel shortage that has already caused the closure of scores of service stations, a senior executive at the Ontario Trucking Association is warning.

As of last night the problem had spilled over into Quebec, with at least 10 stations closing down, according to the newspaper La Presse.

"We have some carriers entering a critical stage and if this continues into next week, trucks will be running out of gas and stopping on the highway," said Stephen Laskowski, vice-president of the Ontario Trucking Association.
An Esso station in Montreal runs dry yesterday. At least 10 gas stations in Quebec have shuttered and scores in Ontario.View Larger Image View Larger Image
An Esso station in Montreal runs dry yesterday. At least 10 gas stations in Quebec have shuttered and scores in Ontario.
Allen McInnis, CanWest News Service
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As shortages increase, prices have shot up as much as 25&#37; for some kinds of truck fuel, Mr. Laskowski said. Gas has jumped from 81? a litre to nearly $1.

A fire at Imperial Oil's refinery in Nanticoke, Ont., 10 days ago forced the company to ration supplies and now the problem is spilling over to the company's competitors, including Petro- Canada, which was forced to temporarily shutter as many as 30 stations yesterday and institute a rationing program just to keep up with demand.

Last night, Shell Canada Ltd. said it was also having problems at its refinery in Quebec, but did not elaborate.

Gordon Wong, a spokesman for Imperial Oil, said the company has cut back on sales of diesel by 60% and gasoline by 40%. Imperial, which sells gas under the Esso banner, has also been forced to close some of its stations, but the company was unable to say how many.

"It's very difficult to come up with an accurate number because some sites go out for short periods while others are out for much longer," Mr. Wong said. "We haven't had a situation like this in recent memory."

Imperial said it expects to get its refinery back up to full production by the middle of March. But that may be too late for many in the trucking industry.

Observers said another major factor in the shortages is the strike at CN Rail, which is hampering the ability of oil companies to deliver to their service station networks. On top of that, some of Imperial's competitors have also been hit with production issues of their own, Mr. Wong said.

According to La Presse, about 10 Esso stations in greater Montreal have shut their pumps. Imperial blames the situation on its competitor Shell Oil, from whom it buys the gas for its Quebec operation.

But even Imperial concedes it is having a hard time getting a grip on the extent of the situation.

"It's not as straightforward as you might think. We have had difficulty getting accurate numbers," Mr. Wong said.

Even the company's estimate as to when it will be able to get its damaged refinery repaired may be in doubt, Mr. Wong said, who noted that it will be "difficult" to choose an accurate date.

Doug Porter, an economist at the Bank of Montreal, said the fuel supply situation will likely have limited negative ramifications, possibly just "a short-term drop in consumer confidence" if the problem is cleared up soon.

According to industry analyst Michael Irvin, getting the Imperial refinery fixed on time is crucial to ending the supply crunch.

"The situation will depend on just how quickly supply is restored," said Mr. Irvin, president of MJ Ervin & Associates.

"The last I heard they'll be up and running again some time this week, and if that's the case and their forecast holds true, I think we should probably see a return to normal within a week or so.

"But it really does hinge on how smoothly things go in getting production restored again."

Part of the problem is that the North American oil industry has built few new refineries in recent years, a situation that has put pressure on the existing network of facilities.

Indeed, part of the fallout of Hurricane Katrina was a continent- wide fuel shortage caused by the destruction of facilities in the region.

Had there been greater investment in new refining capacity in the years before the hurricane, there probably would not have been any shortages, analysts said.

Now the same situation seems to have arisen in Ontario.

According to Mr. Irvin, the Imperial refinery was not a big one by industry standards, but because companies were already operating at capacity its loss is being felt far and wide.

jgreenwood@nationalpost.com


&#169; National Post 2007

[P & CA News Bot]

Premier Dalton McGuinty has asked gasoline suppliers to ensure no town goes dry.
McGuinty said yesterday that a "perfect storm" of conditions led to the provincewide shortage of gasoline, but the worst should be over within seven to 10 days.

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[P & CA News Bot]

Two major fuel suppliers are sounding the alarm for Ontario's trucking industry amid "critical" shortages of diesel fuel in the province.
The fuel shortage, which has seen motorists inconvenienced for more than a week as gas pumps intermittently run dry, has forced Ultramar to suspend diesel deliveries to four Toronto-area service centres and three other Ontario cities – Hamilton, Cambridge and London.

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