Ont. may wait weeks for gas shortage relief
Published Tuesday, February 27, 2007 2:10PM EST
A gasoline shortage that started with Imperial Oil's Esso stations in Southern Ontario is spreading to competing companies as efforts to restablish fuel supplies do not seem able to keep pace with demand and weather troubles.
A winter storm on Monday delayed repairs to Imperial Oil's Nanticoke refinery, which was hit by a fire two weeks ago. That incident cut production at the plant in half.
The problem, which was made worse by the recent CN Rail strike and a December fire at another Imperial Oil refinery in Sarnia, Ont., has started to force other companies to ration gasoline at the pumps. In some instances, pumps are being shut off because they have no fuel to sell.
Now Canadian Tire, Petro-Canada and Shell Canada stations are feeling the squeeze, which is in addition to closures by Imperial Oil.
Shell Canada spokesman John Peck says about four or five of its 200 service stations in the Toronto area are out of gas at any one time.
To exacerbate matter, as many as 30 Petro-Canada stations are encountering temporary shortages.
In Toronto, about 60 retail outlets operated by all the big companies are temporarily without fuel.
Province-wide, about 100 Esso stations, or one-quarter of Imperial Oil's 400 stations, have been shut by supply problems.
Exactly when the shortage will end, and rising prices will return to normal, has become increasingly difficult to pin down.
A spokesman for Ontario's Energy Minister Dwight Duncan said the shortage is expected to continue into next week. But the industry seems less optimistic.
"It takes time. It's a very unusual situation," John Peck, spokesperson for Shell Canada told the Toronto Star
"A number of things have come together at the same time to produce a very tight supply in Ontario and Quebec," he added.
That point of view was supported by Faith Goodman of the Canadian Petroleum Products Institute.
"Arguably, we have never seen a confluence of events such as what we've seen in the last week or two where there's been a refinery outage, distribution issues with rail, cold weather, and we've probably never seen this actually in the history of the petroleum industry in Ontario and unlikely to see it again," Goodman told Canada AM on tuesday.
Criticism and concerns
But the Canadian Independent Petroleum Marketing Association says Ontario does not have enough refining capacity to meet market demand. Association president and CEO Jane Savage told the Star that the province normally imports extra fuel.
"If everything runs smoothly, that all works," Savage said. She added that recent events have meant the system is not running smoothly.
Provincial Opposition Leader John Tory levelled criticism at Premier Dalton McGuinty on Tuesday, saying he has not done enough to protect consumers.
"If Mr. McGuinty wanted to act to provide -- during this emergency period - some protection in terms of people getting supply who need it, he could do that," Tory said Tuesday.
"And if he wanted to call the people in from the private sector and say we're going to be watching very carefully to make sure you don't take advantage of a difficult situation, he could do that.
"That's what premier's do. It's time he acted," Tory added.
As the shortage drags on, Ontario's trucking industry is feeling the pinch and warning of what might happen.
David Bradley, president of the Ontario Trucking Association, said Tuesday that the situation has not yet reached crisis levels but with every passing day "we get closer to being plunged into a crisis."
"I can't put a precise number of days on it but I can say that we wouldn't want to be in the situation we're in today a week from now because we are depleting our stockpiles of fuel, we're seeing shortages now in all of the major suppliers, we're seeing where companies are turning away new customers who aren't able to get fuel from their regular suppliers, Bradley said."
He added that 90 per cent of Ontario's consumer goods and 75 per cent of the province's trade with the U.S. is transported in trucks. Bradley worries that any lost capacity would stop assembly lines and leave store shelves bare.
"We heard a lot about the CN strike in the last couple of weeks. I can tell you if the trucking industry was brought to a halt it would make that strike look like a tea party."
While the system struggles, gasoline retailers are looking for extra supplies.
Petro-Canada is bringing in 500,000 additional litres of gasoline and diesel every day. The company is also looking for fuel sources in border cities such as Detroit and Buffalo.
While Imperial's Nanticoke refinery is expected to be up and running this week, it will not reach full production until mid-March, meaning supply issues and high pump prices could be around for many weeks to come.
With a report from CTV's Chris Eby and files from The Canadian Press