Gas shortages to continue in Nova Scotia if supply management not fixed
'People in authority [must] take very seriously the idea that they can't become complacent': analyst
As the gasoline shortages across the province start to ease, an analyst warns the fuel drought that hit Nova Scotia over the weekend is likely to recur if changes aren't made to the management of supply.
It could be several days before stations across the province are fully resupplied. Questions still linger about how the shortage happened.
Dan McTeague, a senior petroleum analyst with GasBuddy.com and former member of Parliament, said it involved various factors.
"A combination of no refinery capacity, waiting for any potential ship to come in, almost a distressed-type situation where demand exceeded supply, and of course the announcement that there is going to be a gas price decrease," he said.
Two ships were turned away because they didn't have the proper clearance to be able to dispense or drop off at the terminal, McTeague told CBC's Information Morning on Tuesday.
But Imperial Oil said no ships were turned away, although two did take longer to process.
"We did not reject any cargoes during this time — it took more time than expected to conduct product quality testing, treating and processing on the shipments, which led to the extended duration of the fuel shortage," said spokesman Merle MacIsaac.
"Despite our best efforts to take the necessary steps to address the delay of cargo, local fuel demand temporarily exceeded supply. We take responsibility for the shortfall and we will systematically use our internal processes to learn from the event."
McTeague said one ship was carrying what is known as winter-weight gas, which is more prone to evaporation and is cheaper due to the the addition of more butane to the gas mix.
"Not all gasoline is the same. The kind of gasoline that was available exceeded what is normally allowed to be sold in Canada prior to Sept. 15," he said.
"Not by much, I am told. But nevertheless, the ship was not allowed to unload and as a result, the crisis over the weekend — if we can call it that — began."
In summer, additives in the gas keep the vapour pressure down so it'll be less evaporative and thus less explosive on hot days. Environment Canada regulations for summer gas will be relaxed after Sept. 15.
Environment Canada could have relaxed the regulations, given that we're only a few weeks away and given the situation, McTeague said.
Environment Canada said Imperial Oil had not contacted it about changing the regulations.
"There are circumstances whereby Environment Canada could grant a waiver to the oil and gas regulations. However, no request has been received by the department," said spokeswoman Jirina Vlk.
"Environment Canada stands ready to support those involved in addressing this problem should there be a need."
UARB price drop didn't help
Getting gas from the refineries in Saint John wasn't an option, he said, because their gas is mixed with ethanol and many stations in Nova Scotia haven't upgraded their tanks and pumps to be able to accept that blend.
He said the Utility and Review Board decision to drop prices didn't help the situation.
"Many people held off buying until the new price came in and I sense that what we saw here was summer driving demands being what it is, the availability of supply ... has left you in a pretty fragile position," he said.
McTeague said gas price regulation is a concept whose time has come and gone.
"We can quibble about price, but when you wind up running out of gasoline, it's a far more serious signal to policymakers at the provincial level and at the federal level to take that fact seriously," he said.
"I think this is a wake-up call and it's going to require people in authority to take very seriously the idea that they can't become complacent when it comes to energy."