ONLINE SPECIAL: Fuel shortage nearly cripples western Canadian trucking industry, but relief is in sight

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CALGARY, Alta. — Trucking is considered by many to be the true “engine” of the economy – the driving force, so to speak – so if there isn’t enough juice to power the engine of the economy’s engines, it could be a big problem for everyone.

It’s a situation that came very close to shutting down a major part of western Canadian trade in November, thanks to a nearly month-long shortage of diesel fuel. If it had gone on much longer – not that it’s completely over yet – many trucks could have been idled and goods undelivered.

The irony is that a major part of the problem was a lack of the most common element in the known universe: hydrogen. That’s because Suncor’s refinery operation near Edmonton was forced into a “go slow” mode with its diesel production after the company that supplies it with hydrogen for its distillate production couldn’t deliver the stuff.  

The hydrogen shortage came on the heels of a fire and explosion that hit the Consumers’ Co-operative Refineries operation in Regina in October, making a bad situation worse. The refinery accident affected the co-operative’s bulk plant and cardlock locations across the west, forcing the company to limit purchases to 300 litres per visit per card, cut back sales to some commercial accounts and prioritize delivery of diesel products.

The impact of this “imperfect storm” was felt all across the western provinces.

“There’ve been some issues,” admitted Bob Dolyniuk, executive director of the Manitoba Trucking Association. “What we’ve experienced in Manitoba is some locations out of fuel completely a day or two at a time. Other facilities operated on reduced hours and that spread from Manitoba right through B.C.” He said the diesel shortage was more pronounced in Saskatchewan and Alberta, though all four western provinces were affected.

It got to be such a sticky situation that trucking companies were forced to look into alternative sources from the ones they were accustomed to using. Carl Rosenau of Edmonton’s Rosenau Transport, said they were going outside their normal routes, trying to find places that still had fuel.

“In the Red Deer area UFA and Shell were out, so we were going out to places like Stettler and Sylvan Lake – communities off the beaten path – to fuel our trucks,” he said. “I’d also tell my guys that if they pull into a 7-11, Domo, or the Turbo or wherever they stop and they had diesel fuel, to throw a couple of hundred dollars in, hand in their receipt at the end of the day and we had a cheque for them the following day.” It worked, though Rosenau admitted it meant they had to pay more for their diesel than usual that way.

And according to a Canadian Press report, a Whitecourt hauler ended up relying on radio and satellite communications to find out if fuel was being delivered to stations and, if it was, they’d try to get their trucks there as quickly as possible, hoping to be first in line to get filled up. It was a rather hit and miss solution, but it helped.

The shortage also led to some creative thought on the part of diesel dealers. “One of the dealers up in Fort St. John put a note up – if your account isn’t current you’ve been cut off,” Rosenau said. “It’s one way to collect your bills!”

Some trucking companies coped with the added costs of sniffing out the stuff by whatever means possible by putting a fuel surcharge onto their services. One of the large carriers, for example, sent out a notice that it was tacking on a temporary “Fuel Recovery Surcharge” of 1.24% to its “existing surcharge.”

Suncor’s hydrogen deliveries got back to normal on Nov. 18, though Suncor Energy’s Sneh Seetal noted that “It will take at least a few days to move product through the system to customers in Western Canada.”

Seetal said they had prepared for the supply to resume, so they could effectively hit the ground running. “During our third party hydrogen supply disruption we kept the refinery in safe operating mode so that when hydrogen was restored we would be able to efficiently and safely return the plant to normal operations,” he said, adding that “immediately upon receiving hydrogen, we brought our idled units back into operation.”

Things aren’t improving as quickly at the Co-op refinery in Regina, however. According to Vic Huard, vice-president, corporate affairs for Federated Co-operatives Limited, “Repairs have not yet begun as the independent investigation into cause is still underway on-site. Work to get the affected units back online will not begin until that in situ investigation is concluded.”

Huard said they anticipate that full “pre-incident production” won’t be restored until May, 2012. “We continue to work to source diesel from third-party suppliers to make the shortfall,” he said. “We are confident in our ability to source all the diesel required to make up the 20% shortfall in our own production beginning in December 2011.”

– Check the January issue of Truck West for a full report

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