Low-carbon fuel to reduce emissions, but could make fuel more expensive

Bruce Ralston had to admit that the low-carbon fuel plan for BC’s largest oil refinery could eventually make fuel more expensive.

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BC’s energy secretary has been on the defensive as he failed to rein in runaway prices at the pumps during an announcement Monday of a plan to cut some of the fuel going to the Lower Mainland and Vancouver Island flowing, cleaner.

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Bruce Ralston had to admit that a low-carbon diesel plan for BC’s largest oil refinery could eventually make conventional fuels more expensive. BC drivers are already struggling with the cost to refuel, with gas prices reaching $2.23 a gallon at some Metro Vancouver stations.

Other than citing ICBC’s one-time $110 fuel rebate, Ralston had no answers for what the county can do to keep rising fuel prices in check.

“I am well aware of the impact that higher prices have, whether it be on businesses or households where you have to take your kids to football or school. But we are doing what we can and we will consider other measures,” Ralston told reporters.

Ralston appeared alongside Bob Espey, CEO of Calgary-based oil company Parkland Corp., to announce a plan for BC’s largest oil refinery to pump out more low-carbon diesel to reduce greenhouse gas emissions.

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After initially insisting that the emissions-limiting measures would not affect prices, Ralston came back and said fuel prices are likely to rise by one cent per liter in January.

The Burnaby refinery, which also supplies about a third of the gasoline flowing to the Lower Mainland and Vancouver Island, will expand operations to increase production of renewable (or “green”) diesel to about 700 million liters per year by 2026.

Renewable diesel has one-eighth the carbon intensity of traditional fuels, but it’s three to four times more expensive to produce, Espey said. The higher costs of producing more fuel-efficient diesel at the plant would eventually also result in more expensive conventional gasoline.

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“That’s the price of reducing (greenhouse gas emissions) in the economy,” Espey said.

Pictured is the Burnaby Refinery on the shores of Burrard Inlet, March 8, 2022.
Pictured is the Burnaby Refinery on the shores of Burrard Inlet, March 8, 2022. Photo by Jason PaynePNG

The $600 million refinery expansion, funded in part by BC’s standard low-carbon fuel tax credits, estimates that renewable diesel production will reduce greenhouse gas emissions by two megatons per year, equivalent to 700,000 fewer vehicles per year in BC.

BC Liberal energy critic Peter Milobar said he’s been asking the government for years to explain how much the low-carbon fuel standard — an emissions-reducing policy enacted by Gordon Campbell’s BC Liberal government in 2008 — will contribute to the price at the pump, but hasn’t. got clear answers.

“At a time of record high gas prices, I think the traveling public – if you’re trying to raise prices to lower carbon standards, that’s understandable – but people need to know what the outcome is at the pump so they can make an informed decision about their driving and what it really costs them,” said Milobar.

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The government has cited sanctions against Russian oil over Ukraine’s invasion of Ukraine as the reason it has little control over rising fuel prices, Milobar said, but this ignores the fact that BC gas prices are 50, 60 or 70 cents per liter more expensive. than Washington State and Alberta.

With British Columbians paying the highest gas taxes in North America, Milobar said BC could follow Alberta’s lead and pause or temporarily lower the gas tax.

The current price at the pump includes a low-carbon fuel tax, which will add about 11 cents per liter this year and will add 12 cents per liter by 2023, according to the Department of Energy, Mining and Low-Carbon Innovation.

Kathryn Harrison, a political scientist at the University of BC and an expert on climate and energy policy, said a one cent per liter increase in gas prices is a small price to pay for policies that will help BC achieve its greenhouse gas reduction goals. to achieve emissions to 40 percent of 2007 levels by 2030, and to reach net zero emissions by 2050.

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“To solve climate change, we all need to be part of that transition (towards sustainable energy sources). And I think there’s still a degree of denial about that,” Harrison said. “We tend to focus on the costs and not think about the consequences of doing nothing.”

The low-carbon fuel standard is expected to reduce greenhouse gas emissions by five million tons by 2030, or about 31 percent of the total emissions reductions needed to meet the province’s CleanBC climate goals.

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