VIDEO: [CBC News] Kenney’s threat to ‘turn off the taps’ in B.C. is inching closer to reality. [Apr 17, 2019]
Let’s start with what we know about the BC refined fuel market. Let’s start with this from an article in Business in Vancouver:
Provincially, B.C. lacks refining capacity. B.C.’s two refineries produce only 67,000 barrels per day (bpd) of gasoline and diesel, whereas B.C. consumed 192,000 bpd in 2015, according to the CFA [Canadian Fuels Association]. The Parkland Fuel Corp. refinery in Burnaby produces 55,000 bpd and supplies about 25% to 30% of Vancouver International Airport’s jet fuel supply. Alberta’s refineries supply about 100,000 bpd to B.C., and about 30,000 bpd is imported from Washington state refineries, according to the CFA.
To our south, the United States has broken their petroleum market up into five Petroleum Administration of Defense Districts (PADDs). The West Coast of the US, including California, Oregon and Washington, make up PADD 5. Geography defines PADD 5. It is mostly bordered on the east by mountains. The only (non-rail) major east-west connection on the west coast is the Trans Mountain pipeline. As the US Energy Information Administration (EIA) puts it:
Because PADD 5 is isolated, in-region refineries are the primary source of transportation fuels for PADD 5. In 2013, PADD 5 refinery production was sufficient to cover about 91% of in-region motor gasoline demand, 96% of jet demand, and 113% of distillate demand. Heavy reliance on in-region production further complicates the supply chain when disruptions occur. When disruptions occur, all of these factors noted above combine to limit short-term supply options, lengthen the duration of supply disruptions, and cause prices to increase and remain higher for a longer period than would be typical in markets outside PADD 5.