Gas Prices

[aberdeen5698]

Originally Posted by GlassCity

I know operational costs increase, but SkyTrains have much lower operational costs and they make up the bulk of the spending (or at least rationale) behind these tax increases when major projects are announced.

Operational costs are increasing because transit is taking a larger portion of the mode share of all trips in the Lower Mainland, and a big part of the reason is because they are offering a lot more bus service.

[GlassCity]

Originally Posted by aberdeen5698

Operational costs are increasing because transit is taking a larger portion of the mode share of all trips in the Lower Mainland, and a big part of the reason is because they are offering a lot more bus service.

And I understand that overall, but say, the tax increase for the Evergreen Extension was 7 cents a litre on gas or something, right? So they used that to help build it, and since then, once their share of the money is all paid, will they be spending it on operations?

They may be, that's just surprising to me.

[WestCoastEcho]

Originally Posted by libtard

Our refining capacity together with refined products from Alberta made us a net exporter of gasoline in 2017. We exported 6,000 barrels per day to the US. Any more questions?

I would actually like to jump in and say this is a red herring.

The 6,000 barrels you see exported comes from the Parkland Refinery in Burnaby; the Parkland Refinery, as it is a small operation compared to many other refineries in the Pacific Northwest, is a boutique refinery. The primary products it produces is jet fuel, diesel, and super-premium 94 octane gasoline.

Obviously, there isn't enough demand in BC for super-premium gasoline to absorb all of Parkland's production, so the rest gets exported to the US.

BC is actually a net importer of fuel; 2/3 of the refined fuel is supplied from Alberta, some need is met through the Parkland facility, and the rest comes in from Washington State.

Also, the Parkland refinery gets 100% of it's feed comes from Alberta; it primarily runs on light sweet and upgraded synthetic crude produced from Alberta Athabasca oil sands. They have historically struggled to get feed from Trans-Mountain, and as such gotten shipments in via rail as well to supplement the feed.

[ClaytonA]

Originally Posted by GlassCity

And I understand that overall, but say, the tax increase for the Evergreen Extension was 7 cents a litre on gas or something, right? So they used that to help build it, and since then, once their share of the money is all paid, will they be spending it on operations?

They may be, that's just surprising to me.

I agree but, - he asked, "When's funding not a problem?"

The financing requirement is often so long and often there's a future infrastructure project to fund or re-capitalization expenses like major station renovations that the authority would actuallyl be going back even more often to the public asking for funding or to maintain the funding.

For example the Millenium Line was paid off in 2015; http://www.th.gov.bc.ca/publications...ng/rtp2000.htm

[ClaytonA]

To expand (perhaps more for others) also keep in mind the funding typically requires financing unless the government is spending cash/saved money beforehand in a fund. How often are governments allowed politically to put funds into a savings account for future expenses especially with the current multi-decade trend toward libertarianism (i.e. lower taxes)?

Funding is where the funds are coming from (i.e. 1.5 cent gas tax).
Financing is the how or funding cash flow (i.e. $30mm annually for 20 years from the gas tax).

Typically a project incurs debt through project financing during construction. When construction is done, and total borrowing/final cost is achieved, the project debt is rolled into a bond because better terms are possible (e.g. lower interest rates & etc.). Construction is done, now there is no risk more debt will be needed for the project, so you convert the debt into a bond. Most expense cash flows are at the start during construction, and revenue cash flows from financing drip in each year from your gas tax. During conversion it makes sense to match your expense cash flows from the bond (interest and principal payments) with the revenue cash flows from the gas tax doesn't it (i.e. less temporary very short term borrowing required)?

Say you incur $210mm net debt for a $300mm project, your simplified cashflows would look like this for 10 years;

Year--Const Loan--Revenue--Bond Payment--Debt
1----$40mm-------$30mm-------------------$10mm
2----$120mm------$30mm-------------------$100mm
3----$140mm------$30mm-------------------$210mm
4------------------$30mm---$30mm---------$180mm
5------------------$30mm---$30mm---------$150mm
6------------------$30mm---$30mm---------$120mm
7------------------$30mm---$30mm---------$90mm
8------------------$30mm---$30mm---------$60mm
9------------------$30mm---$30mm---------$30mm
10-----------------$30mm---$30mm---------$0

It's not just the construction loan during construction you need to support. You get this with your question, what you want is after the 10 years above for that revenue cash flow to sunset. For Millenium Line, this would have been in 2016 or 16 years. At $1.4b and $60mm this would be after year 24 for Evergreen Extension, or 2040.

[Trainguy]

Just paid $1.058 Can/L in Bellingham for gas. On the way down, the Can price was $1.55/L. No wonder people buy elsewhere, and the gap is set to get much worse.

[jsbertram]

and that it's probably refined from the same Alberta oil coming through the trans-mountain pipeline, but BC doesn't have the refinery capacity to transform all of it into something useful like gasoline or jet fuel, so some of it goes state-side for refining before being shipped back north

should anyone be surprised that oil arriving thru the new bigger pipeline is intended for shipping overseas, since there isn't the refining capacity to process it locally (including WA)

[WarrenC12]

Originally Posted by jsbertram

and that it's probably refined from the same Alberta oil coming through the trans-mountain pipeline, but BC doesn't have the refinery capacity to transform all of it into something useful like gasoline or jet fuel, so some of it goes state-side for refining before being shipped back north

should anyone be surprised that oil arriving thru the new bigger pipeline is intended for shipping overseas, since there isn't the refining capacity to process it locally (including WA)

Only people who don't know what they're talking about think KM2 will mean cheaper gas prices.

[jsbertram]

Originally Posted by WarrenC12

Only people who don't know what they're talking about think KM2 will mean cheaper gas prices.

where was cheaper gas discussed?

[WestCoastEcho]

Originally Posted by jsbertram

and that it's probably refined from the same Alberta oil coming through the trans-mountain pipeline, but BC doesn't have the refinery capacity to transform all of it into something useful like gasoline or jet fuel, so some of it goes state-side for refining before being shipped back north

should anyone be surprised that oil arriving thru the new bigger pipeline is intended for shipping overseas, since there isn't the refining capacity to process it locally (including WA)

Some of it is, but the Washington state refineries mostly run on Alaskan crude, supplemented by crude oil coming from pipelines, and from rail:

https://fortress.wa.gov/ecy/publicat...ts/1808005.pdf


The US market is broken into Petroleum Administration for Defense Districts (PADDs) and PADD 5 (the West Coast, Alaska and Hawaii) is not effectively interconnected to the rest of the US by pipelines. As such it mostly must be self-sufficient or must import oil.

The thing is, Alaska's oil fields are starting to run dry:

https://www.eia.gov/dnav/pet/hist/Le...s=MCRFPAK2&f=A

Because Alaska's production of crude oil is in continual decline, barring a major oil discovery in Alaska that's relatively easy to access, PADD 5 is experiencing a supply shortage of crude oil, which is causing pressure on pricing for refined products.

As such, in recent years, the Washington state refineries have been looking for alternative sources of crude, and they've been sourcing from both whatever they can get from Trans Mountain, and via oil by rail shipments (mostly Bakken crude with some Canadian oil sands supply as well), which currently make up over 25% of Washington state's imports.

Right now, the current pipeline is over 30% over subscribed by shippers looking to ship through the pipeline, and Trans Mountain has been running at capacity for years:
https://www.neb-one.gc.ca/nrg/ntgrtd...y-eng.html#s12


A expanded KM pipeline allows for two things to happen, which will impact refined fuel pricing in the long term;
1. Increased and a more steady supply of refined fuel from Alberta (which currently supplies about 55,000 barrels per day), which produces more refined product than they need;
2. Feeds Washington state refineries, which also supplies a significant portion of refined products to BC (30,000 barrels a day). Currently, Trans Mountain sends about 54% of it's supply down the Sumas spur line to the Washington state refineries, and this is expected to increase to meet demand in Washington state.

[Trainguy]

Originally Posted by jsbertram

where was cheaper gas discussed?

Fred Meyer exit 258 across the street from Costco. $298.9 /USG

BTW, gas price in BC is set to go up again with more carbon and transit taxes.

I love Fred Meyer!!!

[Firebrand]

Originally Posted by Trainguy

Fred Meyer exit 258 across the street from Costco. $298.9 /USG

BTW, gas price in BC is set to go up again with more carbon and transit taxes.

I love Fred Meyer!!!

Alberta went to a similar route. Gas wasn’t as cheap as it used to be. Last time my dad filled his car, he paid ~$65 dollars to fill his 50L tank (~$1.30/L) for a regular in an Esso station. Prices have increased a lot after all the taxes the Feds and Alberta threw us in. The last time I went there was two years ago and it was $0.88/L average.

I was in Orlando for my Disney World trip, and a 7-Eleven gas station close to the hotel I was in was C$0.90/L, even less than the gas you filled up in a Costco in Bellingham (I bet Florida’s Costcos are even cheaper). Florida’s sales tax is less than Washington’s sales tax.

[SFUVancouver]

I've noticed that the price differential between gas in Hope and in Metro Vancouver has narrowed. It used to be significantly cheaper, perhaps 15+ cents/litre, but recently is been less than 10 cents/litre and on my last fill up last week it was within a couple of cents of the price in Surrey. Considering that Hope is not subject to the Metro Vancouver-specific gas taxes, and the high demand I expect exists on such a strategic highway location, it just seems like gas stations in Hope are doing some hefty profit taking.

[milomilo]

Originally Posted by Firebrand

Alberta went to a similar route. Gas wasn’t as cheap as it used to be. Last time my dad filled his car, he paid ~$65 dollars to fill his 50L tank (~$1.30/L) for a regular in an Esso station. Prices have increased a lot after all the taxes the Feds and Alberta threw us in. The last time I went there was two years ago and it was $0.88/L average.

I was in Orlando for my Disney World trip, and a 7-Eleven gas station close to the hotel I was in was C$0.90/L, even less than the gas you filled up in a Costco in Bellingham (I bet Florida’s Costcos are even cheaper). Florida’s sales tax is less than Washington’s sales tax.

That low price was entirely because oil was crashing to around $30/barrel at the time. The carbon tax now is less than 7c/l.

[moosejaw]

Originally Posted by Firebrand

I was in Orlando for my Disney World trip, and a 7-Eleven gas station close to the hotel I was in was C$0.90/L, even less than the gas you filled up in a Costco in Bellingham (I bet Florida’s Costcos are even cheaper). Florida’s sales tax is less than Washington’s sales tax.

Interesting as Florida doesn't even have refineries to process the oil, usually our oil comes from Louisiana.

Washington state tax varies but along the I-5 corridor it averages out to under 9%

[WarrenC12]

Originally Posted by SFUVancouver

I've noticed that the price differential between gas in Hope and in Metro Vancouver has narrowed. It used to be significantly cheaper, perhaps 15+ cents/litre, but recently is been less than 10 cents/litre and on my last fill up last week it was within a couple of cents of the price in Surrey. Considering that Hope is not subject to the Metro Vancouver-specific gas taxes, and the high demand I expect exists on such a strategic highway location, it just seems like gas stations in Hope are doing some hefty profit taking.

Depends what their cost is to get the gas delivered... could be a lot more driver time and effort to get the gas out to Hope.

[WarrenC12]

Originally Posted by jsbertram

where was cheaper gas discussed?

Wasn't that the subtext of your post? You talked about increased crude and lack of refining...

[WestCoastEcho]

Originally Posted by moosejaw

Interesting as Florida doesn't even have refineries to process the oil, usually our oil comes from Louisiana.

Washington state tax varies but along the I-5 corridor it averages out to under 9%

There is extensive amount of movement of oil and oil products between PADD 1, 2, and 3, but the biggest is from PADD 3 (US Gulf Coast) to PADD 1 (US East Coast); which is not surprising because PADD 3 is a centre of extensive refinery capacity, while PADD 1 encompasses a number of major population centres.

https://www.eia.gov/todayinenergy/detail.php?id=4890

In contrast, you can see that very little oil or oil products flows from PADD 5 (the US West Coast) to other regions; this is again due to lack of supply in PADD 5 and the lack of pipeline inter-connectivity between PADD 5 and other regions.

[Trainguy]

Prices are going up 7 cents this long weekend to about $1.55!!

Well,just filled up in Bellingham last night at $104.4 Can$$.

No wonder so many people fill up south of the border. Only going to get worse too.

[flipper316]

Originally Posted by Trainguy

Prices are going up 7 cents this long weekend to about $1.55!!

Well,just filled up in Bellingham last night at $104.4 Can$$.

No wonder so many people fill up south of the border. Only going to get worse too.

Sweet time for my weekly fix of gas to Blaine. Love Nexus even if it gets a little busier. Satisfying feeling just driving right by all the people that are too lazy to fill out the online application. A little victory in life.