Federated Co-op Limited (FCL) provided a glimpse this week at what the future of oil and gas could look like in Western Canada.
On Tuesday, the cooperative announced that it reached a $ 264 million deal to purchase 181 Husky fuel retail sites from Cenovus Energy Inc.
During the announcement, FCL stated that the acquisition will support its vision of reducing its impact on the environment.
“This places FCL in a position to move forward with initiatives that take a leadership role in the transition to a low-carbon economy,” FCL Chief Executive Officer Scott Banda said Tuesday.
Those initiatives include its commitment to reduce greenhouse gas emissions 40% below 2015 levels by 2030 and a goal of achieving net zero emissions by 2050.
Co-op Acquires Husky Fuel Retail Sites in Western Canada in $ 264 Million Deal
Co-op also announced a recent $ 500 million investment to capture carbon dioxide at its refinery complex in Regina and ethanol complex in Belle Plaine, Sask.
But when it comes to fossil fuels, FCL admits it’s a process that will take some time as they plan for the transition.
“The way we look at it is that we will probably have a decade as we move through the transition to ensure that we can continue to offer our members in the communities fuel services,” Banda added.
“By making this transaction, it allows us in the short term to improve our profitability and help finance the investments we have to make to ensure that our energy production in liquid fuels is configured for the next generation.”
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So what’s next for oil and gas in the province?
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Jason Childs, associate professor of economics at the University of Regina, suggested that companies are in the process of succession planning for clean and green alternatives.
He believes companies like FCL expect the gasoline transition to happen quickly and it is a matter of preparing for a sustainable future.
However, he said that does not mean that things are going to change immediately.
“Getting rid of diesel is going to be very difficult,” Childs said. “The energy density of diesel compared to long-distance trucking alternatives just doesn’t make sense. We’ll be stuck with that for a lot longer than gasoline. “
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Childs mentioned that it will be critical for companies to ensure that their stakeholders and customers are on the same page going forward.
“Another question arises: If you are going to do this, then you have to be fairly confident that you will be able to sell your product to retailers,” he explained. “You have to be sure that people are going to buy more from me than, say, one of the competing refineries.”
FCL announced on November 10 that it had secured a $ 5.48 million land option for a renewable diesel plant just north of the refinery in Regina.
While Co-op expects the facility to be operational by 2027, a timeline has not yet been provided.
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