CIPMA Connection

January | 2020

UPCOMING EVENTS CANADIAN FUEL MARKETING CONFERENCE

ADVOCACY CORNER NEWS UPDATES PROVINCIAL CARBON PRICING LANDSCAPE

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ASSOCIATE MEMBERS

CONNECTION CONTENTS

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| UPCOMING EVENTS

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| ADVOCACY CORNER

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| NEWS UPDATES

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| PROVINCIAL CARBON PRICING LANDSCAPE

MISSION CIPMA’s mission is to ensure the sustainability and growth of a healthy and viable independent fuel marketing and distribution sector at both the wholesale and retail levels in Canada. Our specific goals include: Ensuring that independent fuel marketers thrive and have the opportunity to earn a fair and reasonable return that is proportionate to their business risk and capital investment, and ensuring that Canadian consumers and independent fuel marketers have access to a competitively priced and readily available supply of fuel products in all regions of the country.

UPCOMING EVENTS CIPMA CONNECTION | 2020 EVENTS

CANADIAN FUEL MARKETING CONFERENCE April 6 – 8, 2020 | Fairmont The Queen Elizabeth, Montreal QC CONFERENCE REGISTRATION IS OPEN Check your inbox for your invitation reminder.

To see a real-time update, click HERE

Canadian Independent Petroleum Marketers Association | Connection 2020 |

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increasingly being perceived as an attack on the resource sector – and the everyday oil and gas workers, the sector represents.

Chrystia Freeland, in her new role as Deputy Prime Minister, has to her credit done more than her fair share of the heavy lifting post the election, to re-establish some semblance of a positive working relationship with Western Premiers – most notably Premier Kenney and Moe. Minister O’Regan has largely been silent on this file which suggests the Prime Minister is leaving it to his Deputy to drive the narrative for national unity – for better or for worse.

The rhetoric had calmed in recent weeks with federal Members of Parliaments away from the Ottawa spotlight, enjoying some low-profile time back in their respective constituencies.

But with the resumption of Parliament on January 27th, we can be sure climate change will soon be back on the agenda with industry and workers trying to anticipate the federal governments next move.

ADVOCACY CORNER

Although it is still uncertain which climate change policy piece will come down the legislative pipeline first, Minister Wilkinson has signalled the government may soon move forward on laws to facilitate the transition of fossil fuel workers to jobs that fit in a “low-carbon global economy”, also known as the Just Transition Act. In a minority government situation, the Just Transition Act will require support from at least one other political party – likely the NDP or the Bloc Québécois. The NDP are a likely ally, having also committed in the last federal election, their commitment to introduce legislation that transitions fuel workers to the ‘clean jobs of the future’.

The details of the Act are still unknown but at this stage, there is a general sense it is nothing more than political posturing to show the government is acting on climate change.

The Advocacy Corner will be featured in the newsletter on a bi-monthly basis. We will continue to monitor and track all policy related issues that matter to you, our members, in the lead up to and post the federal election.

Common wisdom begs answers to some key questions: What kind of teeth will this Act really have in order to see mass implementation? How will the Act incent transition from oil and gas jobs to clean tech start-up gigs? What’s the timeline? And moreover, how will the Act consider the realities of the consumer market still very much dependent on fossil fuels?

FEDS VS. FUEL INDUSTRY: AN UNCERTAIN GAME OF CHESS

This will be the greatest challenge for this newly former Liberal government – how to balance taking a hard stand on climate change while fostering an economic climate that still very much dependant on the supply and demand of oil and gas for greater prosperity.

By Michelle Coates Mather Natural resources and our environment; the two seem an obvious pairing.

Canada’s vast resources are, after all, entirely dependent on a healthy, vibrant and sustainable environmental footprint.

And yet, here we find ourselves, a few months post the federal election, where an anti-fossil fuels mentality has created a nasty game of chess which finds our natural resource industries defending themselves against a newly re-elected Liberal federal government who are unapologetically determined to make climate change their lasting legacy.

Prime Minister Justin Trudeau and his most visible Ministers responsible for the management of files that directly impact the natural resource sector – O’Regan, Wilkinson and Freeland – believe their re-election was an endorsement from the Canadian electorate that climate change is the number one socio-economic priority for our nation.

The Prime Minister isn’t mincing any words in terms of where his priorities lie – with climate change being the central priority theme of his Speech from the Thone in December.

But here in lies the rub for this minority government. They are dealing with a very real and impassioned “west versus the rest” mentality born of deep resentment for what is

Make no mistake, every move Prime Minister Justin Trudeau makes from here on out will be calculated – he and his colleagues have every intention of winning a majority in the next federal election. While doubtful we’ll be back at the ballot box in the immediate future – Trudeau will be advised to call one when it’s opportune for the Liberals – not the opposition.

But to win a strong majority – he will need to regain seats he lost in Saskatchewan and Alberta. To do that, he and his Ministers must show the fossil fuel sector – and the workers who support it – that their very real economic challenges aren’t being swept under the rug in favour of ideological virtue signaling.

And with a new Conservative Leader on the horizon adding an extra layer of complication to the Liberals ability to see a clear political strategy – the clock is quickly ticking for them to make a move on the board that entices oil and gas workers to vote red next time around.

Until this game of political chess will remain at a stalemate.

Michelle Coates is an experienced leader in public affairs, specializing in government and stakeholder relations, communications strategy development and advocacy outreach. As a government relations representative for CIPMA, Michelle represents the views and interests of independent Canadian fuel marketers across the country, providing timely and pertinent advice and analysis on Federal and Provincial regulations impacting the oil and gas industry.

Canadian Independent Petroleum Marketers Association | Connection 2020 |

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PREMIUM SPONSORS

2020 CANADIAN FUEL MARKETING CONFERENCE

DIAMOND CO-SPONSORS

PLATINUM CO-SPONSORS

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KEYNOTE SPEAKER SPONSOR

Check your inbox for your invitation reminder.

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NEWS UPDATES Please note that all orange text in the following section is hyperlinked. If viewing electronically, you can click to read full articles.

GLOBAL GLOBAL CARBON DIOXIDE EMISSIONS ARE ON THE BRINK OF A LONG PLATEAU Projections just released by the International Energy Agency show that the world has a very good chance of seeing carbon dioxide from the burning of fossil fuels plateau over the next several decades. Peak carbon dioxide may be on the horizon.

PUTIN AND XI OVERSEE LAUNCH OF LANDMARK RUSSIAN GAS PIPELINE TO CHINA Russian President Vladimir Putin and his Chinese counterpart Xi Jinping oversaw the launch of a landmark pipeline that will transport natural gas from Siberia to northeast China, an economic and political boost to ties between Moscow and Beijing.

OPEC AND RUSSIA AGREE TO CUTS IN OIL PRODUCTION TO PUSH UP PRICES The Organization of the Petroleum Exporting Countries and Russia agreed on December 5, 2019 to make further small cuts in oil production to firm up crude prices and compensate for higher output from the United States and other producers outside the cartel.

OIL INVENTORIES TO RISE DESPITE OPEC CUTS, IEA SAYS Global oil inventories will rise in the first quarter of 2020 despite attempts by the Organization of the Petroleum Exporting Countries and its allies to balance the market, the International Energy Agency said Thursday.

Canadian Independent Petroleum Marketers Association | Connection 2020 |

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BELARUS INTRODUCES TAX ON OIL TRANSIT AND TRANSPORTATION Belarus introduced a tax on Friday on oil transportation and transit across its territory, setting it at 50% of profits. The new tax comes during an energy row between Moscow and Minsk over the contract terms on which Russian oil is supplied to Belarus.

COAL MADE FROM PLANT WASTE COULD HELP CUT CARBON DIOXIDE EMISSIONS BY MORE THAN 730 MILLION TONS

GOLDMAN SACHS TO SPEND $750 BILLION ON CLIMATE TRANSITION PROJECTS AND CURB FOSSIL FUEL LENDING Goldman Sachs is overhauling its environmental policies, which includes pledging to spend $750 billion on sustainable finance projects over the next decade, as well as implementing stricter lending policies for fossil fuel companies.

JP MORGAN VALUES UK ELECTRIC CAR STARTUP AT $3.3 BILLION AFTER HYUNDAI & KIA INVEST

Coal made from plant waste could help cut annual carbon dioxide emissions by more than 730 million tons by 2030, according to a new study from China.

Researchers at the University of Science and Technology in China say bio-coal could also help improve food supplies by replacing bio-fuels made from grain.

The Hyundai Motor Company and Kia Motors Corporation have made a 100 million euro ($111.65 million) investment in Arrival, a littleknown U.K. based start-up specializing in electric vehicles.

OIL AND GAS INDUSTRY NEEDS TO DO MORE TO ADDRESS CLIMATE CHANGE: IEA REPORT

FIAT CHRYSLER AND SHELL ARE PARTNERING TO ENABLE IN-CAR FUEL PAYMENTS

The oil and gas industry needs to increase efforts to address climate change or risk becoming socially unacceptable and unprofitable, according to a new International Energy Agency report. Social pressures on the industry are rising, it noted, highlighting growing opposition to new infrastructure projects in certain areas and fracking bans.

MIDDLE EAST TENSIONS DRAW CRUDE OIL EYES, BUT CHINA MAY MATTER MORE: RUSSELL What’s the bigger risk to global crude oil markets this year, the threat of escalating conflict and even war between the United States and Iran, or a surge in exports of refined products from China? The obvious answer is the possibility of military confrontation between the United States and Iran, but if the question is swapped to which factor is more likely to influence crude markets, then China comes to the fore.

UNITED STATES 'MAJOR MILESTONE': US COULD BECOME A SUSTAINED NET OIL EXPORTER AS SOON AS NEXT YEAR, IEA SAYS The International Energy Agency believes the U.S. is on track to become a sustained net oil exporter in either late 2020 or early 2021, after briefly achieving this “major milestone” earlier in the year.

Shell will now allow customers in Chrysler, Dodge, Jeep, and Ram cars to pay for gas through UConnect Market, Chrysler's e-commerce offering.

NATIONAL CANADIAN TIRE WILL OPEN NEARLY 300 MORE EV CHARGING STATIONS BY 2021 Retailer Canadian Tire is taking strides to become one of the go-to charging spots for EV drivers across the nation. The company recently announced it plans to have almost 300 EV chargers at locations across Canada by the end of the year, partnering with Tesla, VW Canada’s Electrify Canada, FLO and Natural Resources Canada.

ENERGY EXPERTS GATHER IN A CHÂTEAU LAURIER BALLROOM TO TALK PHILOSOPHY. POLITELY. As the election stirred up all kinds of polarized opinions on energy — about pipelines, greenhouse emissions and more — Monica Gattinger wondered: What if we’re asking the wrong questions? The University of Ottawa political scientist sat down to ask new questions, with close to 100 academics, energy industry people, bureaucrats and others.

Canadian Independent Petroleum Marketers Association | Connection 2020 |

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CANADA'S CRUDE OIL PRODUCTION WILL RISE 50% BY 2040, NATIONAL REGULATOR FORECASTS The production of crude oil in Canada will grow nearly 50 per cent by 2040 even though energy use per person will decline by more than 15 per cent, according to a long-term outlook released by the Canada Energy Regulator.

THRONE SPEECH PROMISES TAX CUT, CLIMATE ACTION AND BAN ON MILITARY-STYLE FIREARMS In a throne speech promising new efforts to tackle climate change, make life more affordable and impose a ban on "military-style" firearms, the Liberal government called on members of Parliament to work across party lines to solve some of the country's most pressing issues.

GRETA THUNBERG SAYS NORWAY, CANADA OIL VIOLATES CHILDREN RIGHTS Greta Thunberg and 15 other youth climate activists urged Norway and Canada to wind down their oil and gas production, which they said violates children’s rights around the world.

CANADIAN EXPERTISE COULD DRIVE E&P EXPANSION INTO INTERNATIONAL MARKETS: REPORT Canada’s oil and gas industry has a wealth of expertise that could be used by exploration and production companies to enter or diversify into international markets, according to a new report commissioned by the Canadian Global Exploration Forum.

COSIA 'TURNS UP THE VOLUME' ON CALL FOR INNOVATORS TO SOLVE OIL SANDS TECHNICAL CHALLENGES Canada’s Oil Sands Innovation Alliance is reaching out to innovators and technology developers in Canada, and around the world to help it find solutions for a set of more than 60 specific environmental needs related to water, land, tailings and greenhouse gas emissions.

INCOMING CLEAN FUEL STANDARD SPARKS INNOVATION INTO GREENER FUELS While adding biofuels like ethanol generated from corn or wheat crops at relatively small concentrations to the fuel supply has long been part of the equation, new methods are under development to expand the feedstock mix and blend it into the fuel stream earlier, at the refinery.

OTTAWA-FUNDED INSTITUTE FOR CLIMATE POLICY LAUNCHES A new federally funded institute launched on January 21 with the aim of laying out Canada’s options to transition to a net-zero emissions economy. The Canadian Institute for Climate Choices was created with a $20-million, five-year funding commitment from the federal government, but is intended to act independently.

'STILL A LOT OF UNCERTAINTY' IN CANADIAN ENERGY SECTOR: FORMER TC ENERGY CEO It’s too soon to call an end to Canada’s regulatory uncertainty around pipelines, despite recent advancements with Keystone XL and the Trans Mountain expansion project, according to a former TC Energy Corp. chief executive officer.

HOW LIQUID SALT COULD BE THE ANSWER TO OILSANDS TAILINGS PONDS Scientists and engineers at the University of Calgary are taking aim at eliminating watery tailings from the oilsands production process with the help of specialized liquid salt.

FUEL EFFICIENCY, DONALD TRUMP AND CANADA’S BATTLE AGAINST CLIMATE CHANGE Our country remains among the world’s top 10 emitters of climate-heating pollution. A big reason why is the vehicles Canadians drive: too many trucks and too many SUVS – all burning too much gasoline. An International Energy Agency report last year showed the fleet of new vehicles in Canada had the worst fuel efficiency in the world, at 8.9 litres every 100 kilometres.

MOVING MOUNTAINS: ENTREPRENEURS AT ACCELEWARE WORKING TO REDUCE COSTS AND ‘GREEN-UP’ OILSANDS PRODUCTION USING RF HEATING Mike Tourigny and the team at Acceleware are advancing its radio frequency technology toward its first field test as interest grows in its demonstrated potential to dramatically reduce costs, water use and GHG emissions.

TRUMP ADMINISTRATION OKS BUILDING KEYSTONE XL PIPELINE ON FEDERAL LAND The administration of U.S. President Donald Trump approved a right-of-way allowing the Keystone XL oil sands pipeline to be built across U.S. land, pushing the controversial $8 billion US project closer to construction though — court challenges still loom.

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WESTERN REGION WESTERN CANADA: AT LONG LAST, PIPELINE CONSTRUCTION BEGINS ON TRANS MOUNTAIN EXPANSION As the Trans Mountain Pipeline expansion has dragged on, the anxieties of supporters and opponents have been wrapped up in a simple question: When will crews start putting pipe into the ground? That is exactly what’s about to happen along the first stretch of the route near Edmonton.

OILSANDS NEEDS PIPELINES TO CONTINUE IMPROVING ENVIRONMENTAL PERFORMANCE: IMPERIAL CEO Outgoing Imperial Oil CEO Rich Kruger says the market access challenges that continue to weigh on Canada’s oilsands industry are making it harder for companies to deploy innovations that could significantly reduce environmental impacts.

ALBERTA'S ENERGY WAR ROOM TO FIGHT CAMPAIGN OF LIES ABOUT OIL AND GAS INDUSTRY Alberta Premier Jason Kenney officially opened the new $30-million Canadian Energy Centre on December 10, 2019 in Calgary. The Centre is to have a research unit, an energy literacy unit and a rapid response team to challenge misinformation.

MINISTER 'WRESTLING' WITH HOW FRONTIER OILSANDS MINE WOULD FIT INTO CLIMATE COMMITMENTS The federal environment minister says he has spoken with his Alberta counterpart about how Canada's climate commitments could weigh into his decision about a large proposed oilsands mine.

OIL AND GAS CHEERS RULING THAT CLEARS HURDLE FOR TRANS MOUNTAIN The Canadian Association of Petroleum Producers says it is pleased, but not surprised, by the Supreme Court ruling that shut down British Columbia's attempt to regulate what can flow through an expanded Trans Mountain pipeline.

ONTARIO / QUÉBEC REGION CONSERVATIVES TOO QUIET ON CLIMATE CHANGE, SAYS ONTARIO ENVIRONMENT MINISTER Ontario’s Environment Minister said conservative parties haven’t been vocal enough on climate change, as he acknowledged more needs to be done to reduce greenhouse gas emissions after a rebuke from the province’s Auditor-General.

POSTHASTE: WATCH OUT ALBERTA, QUÉBEC WANTS TO BECOME CANADA'S NEW ENERGY POWERHOUSE Move over Alberta, Québec has designs to become a major provincial exporter of energy to the rest of Canada and even wider North America. On Monday (January 13), premiers of Québec and Newfoundland and Labrador said they were studying how their hydroelectric resources can help the Atlantic region move away from coal power.

INNOVATIVE CUSTOMER EXPERIENCES SHAPE IRVING OIL'S NEW STORE CONCEPT Irving Oil opened its first store with a new format designed specifically to provide optimal, innovative customer experiences. The location has elements of a market-style café with a refreshing and modern aesthetic, it features freshly prepared comfort food offerings; indoor and outdoor seating areas; options for self-checkout; and sparkling clean restrooms.

ATLANTIC REGION WESTERN CANADIAN GAS, EUROPEAN DEMAND KEY FOR LNG PROJECTS IN EASTERN CANADA Liquefied natural gas projects planned for eastern Canada represent a significant opportunity for Alberta’s gas producers to reach tidewater and access markets in western Europe.

MARITIMES AND NORTHEAST PIPELINE COMMITS $200M IN CASE OF MISHAP The owners of the Maritimes and Northeast Pipeline that runs through Nova Scotia and New Brunswick have pledged $200 million to cover mishaps on the natural gas line.

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PROVINCIAL CARBON PRICING LANDSCAPE Overview In December 2016, the Government of Canada, along with most provinces and territories agreed to the Pan-Canadian Framework on Clean Growth and Climate Change to meet our greenhouse gas (GHG) emissions reduction target and grow the economy. Pricing carbon pollution is central to the Framework.

Under the Framework, Provinces can choose which type of system to implement: either (i) a direct pricing system (such as a carbon tax like British Columbia’s or a carbon levy combined with a performance-based emissions system like Alberta), or (ii) a cap-and-trade system (e.g., Ontario and Québec).

As of January 2019, the Federal Government imposed a “backstop” carbon pricing system for provinces and territories who either don’t elect to create their own pricing solution or who wish to apply the federal system.

Here’s where the current provincial pricing landscape lands:

Newfoundland and Labrador Federally-Approved Carbon Tax - 4.42c/litre (effective as of January 2019)

British Columbia Carbon Tax – 8.89c/litre (effective as of April 2019)

PEI Carbon Levy – Increasing to 6.63c/litre (to begin in April 2020)

Nova Scotia Cap and Trade Program (effective as of January 2019)

Alberta Repeal Carbon Levy – Federal Carbon Backstop took effect January 2020. Increasing to 6.63c/litre (to begin in April 2020)

Saskatchewan Federal Carbon Backstop – Increasing to 6.63c/litre (to begin in April 2020)

New Brunswick Manitoba Federal Carbon Backstop – Increasing to 6.63c/litre (to begin in April 2020)

Québec Cap and Trade Program (effective as of January 2013)

Federal Carbon Backstop – Increasing to 6.63c/litre (to begin in April 2020)

Ontario Federal Carbon Backstop – Increasing to 6.63c/litre (to begin in April 2020)

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We want to share the successes of our members.

If you want to feature your company’s recent achievements, updates, or simply want to be featured, please reach out to Jennifer Stewart at jstewart@cipma.org

Jennifer Stewart, President and CEO jstewart@cipma.org | Cell: 613.915.5699

Rita Molinari, CMP, Operations Manager rmolinari@cipma.org | Cell: 416.358.5207

MAILING ADDRESS | 3-1750 The Queensway, Suite 115 - Toronto, ON., M9C 5H5

Canadian Independent Petroleum Marketers Association | Connection 2020 |