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


Bruce Ralston was forced 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 minister found himself on the defensive for failing to rein in runaway prices at the pumps during an announcement on Monday of a plan to make some of the fuel that flows to the Lower Mainland and Vancouver Island cleaner.

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Bruce Ralston was forced 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 balking at the cost to fill up, with gas prices as high as $2.23 a liter at some Metro Vancouver stations.

Other than citing the one-time $110 fuel rebate from ICBC, Ralston had no answers on what the province can do to control soaring fuel prices.

“I’m acutely aware of the impact that increased prices are having — whether it’s on businesses or on households where you have to get your kids to soccer or school. But we’re doing what we can and we’ll 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 cut greenhouse gas emissions.

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After initially insisting the emission-reducing measures would have no impact on prices, Ralston backtracked and said fuel prices will likely jump by one cent per liter by 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 the production of renewable (or “green”) diesel to about 700 million liters a year by 2026.

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

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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 Payne /PNG

The $600-million refinery expansion, funded in part by BC’s low-carbon fuel standard tax credits, estimates the production of renewable diesel will reduce greenhouse gas emissions by two megatonnes annually, which is equivalent to 700,000 fewer vehicles a year in BC

BC Liberal energy critic Peter Milobar said he has been asking the government for years to lay out how much the low-carbon fuel standard — an emission-reducing policy brought in by the BC Liberal government of Gordon Campbell in 2008 — will add to the price at the pump, but has received no clear answers.

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

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The government has cited sanctions on Russian oil due to that country’s invasion of Ukraine as the reason it has little control over soaring fuel prices, Milobar said, but this ignores the fact that BC’s gas prices are 50, 60 or 70 cents a 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 reduce the gas tax.

The current price at the pump includes a low-carbon fuel levy, which added about 11 cents a liter this year and will add 12 cents a liter in 2023, according to the Ministry of Energy, Mines and Low Carbon Innovation.

Kathryn Harrison, a University of BC political scientist and expert in climate and energy policy, said a one-cent-per-litre increase in gas prices is a small price to pay for a policy that will help BC reach its targets of reducing greenhouse gas emissions to 40 per cent of 2007 levels by 2030, and reach net-zero emissions by 2050.

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“To fix climate change, we’re all going to need to be part of that transition (to sustainable energy sources). And I think there’s still a level of denial about that,” Harrison said. “We tend to focus on the costs and not think about the consequences of inaction.”

The low-carbon fuel standard is expected to reduce greenhouse gas emissions by five million tonnes by 2030, or about 31 per cent of the total emission reductions required to meet the province’s CleanBC climate targets.

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