Loading ...
Interview with Jane Savage: Part 3 – Renewable Biodiesel and Bio at the Pump
This is the third part of a conversation I had with Jane Savage, President and CEO of CIPMA, the Canadian Independent Petroleum Marketers Association. You can read the first part here and the second part here
Renewable biodiesel
A: The new clean TDI is warranted for a blend of up to 5% biodiesel, which is referred to as B5. So let’s talk about renewable biodiesel for bit.
J: I think it’s great. Another step in our transition from a hydrocarbon centric economy. Good for VW. They are well-positioned for the new federal renewable fuel standard of 2% (B2) in diesel by 2012. They seem to be well-positioned in the market.
A: Are you focused on this issue, biodiesel, in preparation for the transition to a blended fuel?
J: Some focus, yes.
A: You’re not positive we will see biodiesel at the pump in 2012?
J: The 2% by 2012, yes. I am just not that certain of how the distribution of the renewable fuel will fall out.
A: Do you mean a “best use” analysis of the renewable content?
J: Yes, I suppose you could refer to it as a most efficient use of the resource. When we have the production and handling capacity for the renewable fuel in 2012, how will it be used? 2% of the national diesel and heating oil pool is about 640 million litres. Who should be using it? Heating oil for domestic or industrial boilers? Long haul trucking? The light duty auto sector? These questions have yet to be answered.
A: Using renewable diesel to replace the heavy fuels used in industrial furnaces would seem to make a lot of sense.
J: Sure. We would call that a stationary power system, and those certainly are a significant consumer of heavy hydrocarbons.
A: But you are confident that by 2012 2% of our national use will be renewable? There just may not be a biodiesel refueling station around every corner.
J: Yes and no. In many places across the country you can already fuel with a B5 blend at the pump or have the option to use a bio based home heating oil. Some of the independents (our members) have been providing this service since 2004. We may not see bio available to everyone. The regulation will determine that.
Bio at the Pump
A: How will regulation impact our ability as drivers to locate biodiesel at the retail pump?
J: Well, we’re in the middle of a process. And, yes, the devil is in the details again. And I might add, many good people are working very hard to find solutions. Nagging and unanswered questions remain around issues of reporting and requirements of the RFS.
A: You’re talking about reporting from the refiners of diesel?
J: Yes. How will we arrive at the 2% bio component. Sorry, let me back up. To deliver a bio fuel (98% petroleum with a biomass diesel component, e.g. B2, 2% biodiesel), the petroleum and renewable bio fuel are blended, or mixed. Who is going to do this? Where will the physical blending occur? At how many facilities? In St.John, New Brunswick? Burnaby, BC? Every region? Will refiners and importers be required to report a national average of 2%, or on every litre produced? Maybe some regions will be B5 and others B0. No one knows this yet because the regulation has not been completed. Is there sufficient transition time to complete the production, blending, transportation and storage facilities to make it happen?
A: Sounds as though this is an enormous task.
J: We’re talking about a regulatory issue at the federal level. Of the 32 billion litres in the national diesel/heating oil pool, how do you decide where the 2%, 640 MILLION LITRES, is used? So, yes, this is very complicated and time-consuming for the many varied interests at the table.
A: When is the regulation scheduled to be completed?
J: The end of 2009. With a planned 5% ethanol mandate in 2010, you can see the challenge. We should be better off with 2012 on the biodiesel content but it’s not yet a slam dunk.
A: Earlier, when we were talking about refining capacity in Canada, you talked about a lack of refining infrastructure. We’re importing refined products while we sit on vast supplies of crude. As a refiner, why not construct a new facility?
J: Refiners are looking at renewable diesel refining investment in Canada, specifically in areas of dense population. But I expect we need the regulation before anyone will commit financing for such a project. We get back to talking about how the 2% blend will be distributed.
A: Is some of this debate delaying the release of federal funds within the Eco Energy Program?
J: Many business plans are awaiting the regulation. And let’s not forget the Low Carbon Fuel Standard in all of this. Ontario and BC have adopted the standard.
A: A biofuel is a low carbon fuel.
J: Exactly. So you can also see how this relates to the discussion of carbon and a tax, fee or cap and/or trade scheme to address the carbon content of products and services.
A: So if I use B5 I am reducing my carbon footprint?
J: Compared to 100% hydrocarbon (petroleum), yes.
To read the third part of the interview, please click here.
0 Comments