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Thursday, January 09, 2014

The Perfect Storm...

Tonight, consumers of propane in the province seem to have at least a small victory on their hands, all in light of the past weekend's power crisis.

On the NTV Evening News Hour, the spokesperson from North Atlantic stipulated that consumers who have orders in that, as of yet have not been filled, will not have to pay the new regulated maximum of $1.03.1 cents a litre for product. Consumers here have been waiting here since what seems like forever, to get supplies of propane for their homes. Some homes that use propane for their central heating source still have not been addressed, while consumers who use it for things such as propane fireplaces, have been bumped further down the list for service.

Consumers of heating oil also face similar circumstances where, because of conditions like high demand and foul weather, have been at times left in the lurch. While a slower process, consumers are getting their heating and stove oils, although it can be sometimes a long wait for product.

Gasoline stations here tonight are running short across the province. That situation also has been developing for some time, with a few stations running out of product. In the face of power availability, some stations simply couldn't let you get it out of the pumps.

Others have simply been left in the lurch because of an ongoing distribution/shipping problem.

It's hard to believe that we've come to this point, but it was all predicted to happen as far back as 1998.

In that year, several things happened, none the less of which was a decision by Big Oil to enter into a "reciprocal sales arrangement" with each other's companies. It was generally agreed back then that Irving Oil would control inventory and offloading on one side of the province, and Imperial oil to stock the other. Al companies would share inventory from each others stock, and the process of the closing of coastal on-loading and offloading stations. Some marine facilities, along with various storage facilities would close permanently. Refineries would also be next...

Just this last summer, a critical piece of consumer infrastructure was lost to all Atlantic Canadian consumers. Gone would be the Imperial Oil refinery in Dartmouth, Nova Scotia. Consumers here would remember also losing the Ultramar refinery in Holyrood. Having shut their doors, the capacity would now be handled out of the Irving refinery in New Brunswick, with the possibility of alternate supplies being imported or handled in some cases by the North Atlantic refinery in Come By Chance.

There has to be a moratorium on the further closure of refineries in this country, plain and simple. That's one problem that has escaped government scrutiny.

Its costing Newfoundland and Labrador consumers dearly.

The powers of the Competition Bureau of this country are shown to be weak, and now we're paying the piper. With a lack of available supply with the power outage affecting North Atlantic's refinery in Come By Chance, the writing is on the wall for consumers if we see the refinery close. With margins being the best they have been in months, the veritable rug was pulled out from under the feet of the refinery just when it was raising its head above water again, and all because of the power outage this last week in the province.

So much for a stable electricity source that would keep the refinery going, but without it, there's enough evidence here to sustain the thought that, we're in trouble. You can imagine the Atlantic Canada coast with only one supplier of product to an ever growing economy; We're not going to be able to meet the demand, and that means the potential for the one company left standing to call the shot on prices.

Add to all this a simple problem of getting the product to consumers like you and me.

Why product is not available in some areas and gas stations left dry is a relatively simple problem to fix, but only if Big Oil is willing to address it. Simply put, for one company, a lack of drivers out there is killing you and me at the pump with no product. People are being left to shiver in the dark because of no electricity at times, but also because there's no one to drive the heating oil product to remaining tanking facilities: some companies simply don't want to pay higher wages to those guys and girls who were driving the trucks in the first place. In places like Fort McMurray, in Labrador West, or even in the Bakken regions of the Dakotas, a much higher wage can be garnered, and that's where our drivers are headed. Sometimes you have to pay more to get the best drivers.

The out-migration of skilled workers continues.

You have to compete with other markets for employees too.

$18 an hour simply doesn't do it now in a world where our people can take a flight to jobs paying between $50 and $60 in places like Alberta.

In the meantime, if you get a minute, take the time and thank the Canadian government, along with the Competition Bureau, who stood by uselessly, and did nothing to stop the Big Oil companies from working closely together. Between them, and a power outage here that gave us the new "game day scenario" of what to expect in the future, we'll all be potentially paying the ante to the devil's pot.


It just hasn't turned into a personal one for some here in the province.

It's also turned into an economic one for everyone...


George Murphy
twitter: @GeorgeMurphyMHA

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