Richmond - The Editor, There's a largely overlooked background issue with regard to the proposed Vancouver Airport Fuel Facilities Corporation (VAFFC) fuel delivery project that also needs to be considered.
Richmond - The Editor, There's a largely overlooked background issue with regard to the proposed Vancouver Airport Fuel Facilities Corporation (VAFFC) fuel delivery project that also needs to be considered.VAFFC argues that Burnaby's Chevron refinery cannot meet their needs.While most of the discussion revolves around the viability of the existing Burnaby to YVR jet fuel pipeline, the elephant in the room getting little or no mention is that the Chevron refinery is unable to operate at full capacity.This is because more and more of the synthetic crude arriving from Alberta via the current Kinder Morgan pipeline is being diverted away from the refinery to be shipped to higher paying offshore customers via tankers through Vancouver harbour. Chevron has speculated that it may even have to shut the Burnaby refinery down if it does not get enough of the synthetic crude coming from Alberta.The existing Burnaby to YVR jet fuel pipeline is also operated by Kinder Morgan.Given that less jet fuel runs through the line, Kinder Morgan has indicated that it may have to shut it down and is demanding higher rates to keep it operating at less than optimal capacity driving jet fuel prices up.This uncertainty is a major contributor to VAFFC's quest for other sources of jet fuel.It's not so much that the Chevron refinery in Burnaby isn't capable of producing more jet fuel. It cannot, as its crude supply is being choked off in favour of offshore customers.In other words, this, to a large extent, is an artificial problem.The National Energy Board (NEB) denied a Priority Destination Designation for the Burnaby refinery in July.Alberta-based oil producers, shipping their product through the Kinder Morgan crude pipeline, understandably want to sell to the highest bidders.Unfortunately, domestic refiners are typically not the highest bidders, so they'd rather sell to offshore customers without regard to B.C.'s (Lower Mainland) strategic interests.It's about time that the federal government introduced regulations that ensures oil producers meet domestic (B.C. refinery) demand if the NEB remains blind to B.C.'s needs.The irony is that, if they do not, Lower Mainland fuel costs will increase even more and there will be a lot more trucks laden with Alberta and Washington State refined gasoline on our highways, than jet fuel trucks from Cherry Point to YVR.Frank SutoRichmond
