FEBRUARY
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2018
ICE, ICE BABY BY JOHN EICHBERGER
CIPMA MEMBER SPOTLIGHT MCDOUGALL ENERGY INC.
2018 CANADIAN FUEL MARKETING CONFERENCE APRIL 23-25, 2018 | HYATT REGENCY, MONTREAL
FULL MEMBERS
ASSOCIATE MEMBERS
Since 1924
P.D. McLAREN LIMITED
CONNECTION CONTENTS 1
| MESSAGE FROM THE PRESIDENT | Jennifer Stewart
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| ICE, ICE BABY | Fuels Institute | By John Eichberger
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| CIPMA MEMBER SPOTLIGHT | McDougall Energy Inc.
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| UPCOMING EVENTS | 2018 Events
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| ADVOCACY UPDATES
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| NEWS UPDATES | 2018 News
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MEMBER UPDATES | New Members
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.
MESSAGE FROM THE PRESIDENT JENNIFER STEWART | PRESIDENT
I’m so pleased to share with you an updated look and feel for Connections – our monthly magazine for CIPMA Members, Associate Members and industry alike. Within this edition, you’ll find a homage to an old classic with an industry twist (ICE, ICE Baby), a Member Spotlight, and industry updates. Of course, we also have our Canadian Fuel Marketing Conference coming up in April. We have an exciting roster of speakers and will kick off the conference with a keynote from former Prime Minister of Canada, Jean Chrétien. If you haven’t yet registered, space is filling up quickly, so we encourage you to do so before the conference is sold out. Next month we’ll be sharing our Advocacy update, which speaks to the government relations efforts of the association. With a number of regulatory reviews ongoing by various governments, we encourage you to review the update. We will also be hosting an educational session at the Conference to recap our advocacy priorities, and what traction we’re having on these files. With that said, I hope to see many of you in April. Of course, if you have any questions, please feel free to reach out to me directly. Jennifer Stewart President and CEO Canadian Independent Petroleum Marketers Association
Canadian Independent Petroleum Marketers Association | Connection 2018 |
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The 2018 Canadian Fuel Marketing Conference Presented by the Canadian Independent Petroleum Marketers Association
REGISTER NOW Sponsorship opportunities are available, please contact Rita Molinari
rmolinari@cipma.org
FOR MORE INFORMATION, PLEASE VISIT | WWW.CIPMA.ORG Canadian Independent Petroleum Marketers Association | Connection 2018 |
ICE, ICE BABY BY JOHN EICHBERGER | FEBRUARY 2018
Alright, stop. Collaborate and listen. ICE (internal combustion engines) are here and they’re on a mission. Like Vanilla Ice came under pressure from David Bowie and Freddie Mercury for “sampling” their technology, today’s ICE vehicles are likewise under pressure from fuel economy standards and the unrelenting drum beat of electrification which threatens to steal their market. But don’t count ICE out of the equation – there is a resurgence under way that should prove more fruitful than Vanilla’s effort to shift from rap to hardcore rock, then ultimately to high-end house flipping. In an era when all headlines extol the coming electrification of the transportation market, and many are claiming the ICE is as efficient as it can get, in the labs and workrooms of the world’s auto makers, engineers have been working diligently on new designs and optimization strategies to squeeze out a few more miles per gallon. And their efforts are delivering results, which is good news for consumers. Because, even if electric vehicles (fully battery powered and without an accompanying ICE) can gain 30% - 40% share of new vehicles sold in the next 20 years, that still means 60% - 70% of new vehicles will be powered by some sort of combustion engine. The more efficient that engine, the better for consumers. And progress is being made. Here is a sample of what we are seeing: • Mazda has announced the introduction in 2019 of Skyactive X – a spark controlled compression ignition gasoline engine. This system is designed to squeeze a gasoline-air mixture so tightly that it will auto-combust (like diesel fuel), delivering perhaps up to 40% greater thermal efficiency than a traditional spark-ignition engine. The reason a spark is used at all is simply to control timing to ensure that pre-ignition (aka knock) doesn’t damage the engine. This technology has been a target for engineers for decades and it seems that Mazda has cracked the code. (I wonder if the designs were hidden in the Castle Anthrax?)
• Nissan has already introduced in some of its Infiniti models a variable compression ratio turbo engine. What does this mean? It means that an engine can modify the compression ratio of its operation to maximize efficiency under different operating loads and requirements. In other words, when the engine needs more power and performance, it will deliver. When it can cruise at a lower power level, it will do so. In fact, this engine can shift ratios from 8:1 all the way to 14:1. Nissan reportedly has been working on this engine for 20 years and has incorporated more than 300 patents under the hood of these vehicles. • Auto engineers throughout the industry are playing around with intake valve timing to adjust the amount of fuel-air mixture introduced into the piston chamber to ensure that less energy is required (and less wasted) to complete the power stroke of the piston. Unfortunately, this results in decreased power and, when a driver needs to punch it, could yield suboptimal performance. So different companies are pairing such engine designs with either a turbo charger to restore power when needed or with a hybrid battery system that will boost power when needed. • Other auto companies are hyper-focused on optimized engine design that would maximize efficiency when operating on a specific, higher-octane fuel. This strategy may require an adjustment to fuel production and distribution to ensure the appropriate fuel is available when these engines hit the market, but the strategy could result ultimately in a 15% - 20% efficiency boost when all enabled technologies are loaded. In addition, advancements in transmission design are yielding great benefits. My first vehicle was a 1974 Chevy Luv with a four-speed manual transmission. I have since had vehicles with five and six-speed manuals and five and six-speed automatics. Today, seven, eight and 10-speed automatics are becoming common options and continuously variable transmissions are getting better every year. Each improvement delivers greater efficiency.
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What does this mean? In an age of repeated announcements by governments and auto companies relating to a full transition to an electrified market, you have to look at the details and the fundamentals developing behind the scenes. These announcements almost always incorporate a role for hybrid vehicles, which run on traditional liquid fuels running through an internal combustion engine. Advancements in ICE boost efficiency of these hybrid systems and can prolong the market life expectancy of liquid fuels.
Hence, while everyone is looking at the trends towards electrification and autonomous vehicles, there remain those who continue to crank out more efficient and higher performance ICE technologies, and that is very important. Because, no matter how much investment is made in the EV market, ICE are going to be here a very long time and these improvements will not only benefit consumers, they will contribute to a longer life expectancy for this technology.
Will the fuels market have to adjust formulations? Perhaps. There is a lot of momentum building behind a move to boost fuel octane to enable more efficient engine design, but some of the advancements I mention above are not dependent upon a higher-octane fuel. They deliver enhanced performance and efficiency using regular 87 AKI fuel, but I suspect we will have to figure out ultimately how to manage a transition to a higher-octane fuel.
As Vanilla would say, “Word to you mother.�
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CIPMA MEMBER SPOTLIGHT FEBRUARY 2018
MCDOUGALL ENERGY INC. The McDougall story began in 1945 when Allan McDougall started his career in the petroleum business, working with Imperial Oil in Timmins, Ontario. In 1949, he and his family relocated to Thessalon, Ontario where Allan founded McDougall Fuels and became the regional Esso agent. He ran the company successfully until 1972 when he retired and his son Bryan and wife Joy took over operations. Bryan had started with the company in 1968 and had been the one to introduce Home Heating products and services into the McDougall Fuels family repertoire. Bryan and Joy immediately began to expand the company further, amalgamating with a similar operation in Blind River and doubling the size of McDougall Fuels. In 1987 McDougall Fuels became an Esso Branded Reseller, purchasing existing agencies, including the Sault Ste. Marie office, from Imperial Oil. Through the next three decades the business continued to expand through both organic growth and many acquisitions focused in Ontario and BC. In the spring of 2008 Bryan McDougall Fuels Limited changed its name to McDougall Energy Inc. to better reflect the scope and strategy of the diversified business. Today, McDougall Energy is in its third generation of family ownership, with Darren McDougall leading the ever-growing company forward with family members Chris and Jennifer along with a very talented senior Management team.
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Below is a brief interview with Darren McDougall, President of McDougall Energy Inc.
Q: What is next for McDougall Energy? Our industry is changing very fast. We have rapid consolidation, regulatory changes, technology impacting our business like never before and a very complex supply landscape. We have a clear plan to move forward and continue to grow at a very controlled pace. We think complexity creates opportunity and our business model is focused on growing in all aspects of our business.
Q: What has been the key to your growth and success in the petroleum marketing sector? We have a very clear, concise strategy that we execute against very well. It involves both organic growth and growth through strategic acquisitions along with creating the culture of being a great place to work.
You can visit the McDougall Energy website here: www.mcdougallcorp.com
Q: McDougall Energy has been named one of Canada’s Best Managed Companies for six years in a row. What’s the secret to creating a strong corporate culture? We have a clear set of core values that are the context for all decisions that every person in the company makes. They help set our culture and are timeless guiding principles for us all. Our people embrace these values and there is no compromise in this area we are all rowing in the same direction
400
NUMBER OF EMPLOYEES
70
YEARS OF EXPERIENCE
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YEARS IN A ROW AS ‘CANADA’S BEST MANAGED COMPANY’
BRANDS OPERATED
Delivering you peace of mind. Unique solutions, great products.
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UPCOMING EVENTS CIPMA CONNECTION | 2018 EVENTS
2018 CANADIAN FUEL MARKETING CONFERENCE April 23-25, 2018 | Hyatt Regency, Montreal
The Canadian Fuel Marketing Conference is the #1 networking and educational event for the fuel marketing industry in Canada. Join us April 23 to 25, 2018 at the Hyatt Regency Montreal for our annual Conference presented by CIPMA. We have an exciting slate of speakers and educational sessions planned. There are sponsorship opportunities still available to help you showcase your brand image, build a stronger presence within the industry and broker new business with prospective partners. Interested in enhancing your profile within the industry? You can also check out our advertising options and contact Rita Molinari to discuss. To register, click here. For more detailed information on the Conference, please click here.
CIPMA GOLF CHALLENGE
Thursday, September 13, 2018 | Glen Abbey Golf Club, Oakville, ON Mark your calendars! Watch for details, coming soon.
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ADVOCACY UPDATES Government advocacy is the main priority for the CIPMA team, and having a voice on important issues at the municipal, provincial and federal levels of government is one of the key reasons why members join our organization. CIPMA members receive quarterly updates on the association’s advocacy efforts, which are also posted on the Members Only section of cipma.org.
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NEWS UPDATES CIPMA CONNECTION | 2018 NEWS
Please note that all orange text in the following section is hyperlinked. If viewing electronically, you can click to read full articles.
GLOBAL
GERMAN COURT RULES IN FAVOUR OF CITY BANS ON DIESEL CARS This feature examines the ruling on February 27 to allow German cities to ban heavily polluting diesel cars from their streets. U.S. OIL IS ON THE MARCH - AND IT’S ALL BECAUSE OF CANADA This article looks at the impact of Canadian pipeline reductions on the U.S. oil market. MEXICO BECOMES 30TH INTERNATIONAL ENERGY AGENCY MEMBER COUNTRY This piece explores what it means to be a member country of the International Energy Agency, after Mexico was officially welcomed as the 30th International Energy Agency member country on February 17. EGYPT’S POTENTIAL GAS SURPLUS COULD FEED GLOBAL LNG GLUT This news story examines Egypt’s current high supply of natural gas, and their potential capacity to turn gas into super-chilled liquefied natural gas, which can be exported by ship. Canadian Independent Petroleum Marketers Association | Connection 2018 |
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UNITED STATES NATURAL GAS INDUSTRY SURPRISED IT COULD BE SO MUCH CLEANER This feature explores measures that can be taken within the supply chain to reduce GHG emissions, reviewing survey results from energy executives in a study conducted by the Energy Institute. NEW TIMELINE PROPOSED FOR OREGON’S CAP AND TRADE BILL This piece looks at a proposed amendment to Oregon’s controversial cap and trade bill that would allow the local Legislature to vote on the “cap” for greenhouse gas emissions while delaying a vote on the “trade” portion of the bill until next year. GROUPS WANT DETAILS ON TRUMP’S APPROVAL OF KEYSTONE PIPELINE This article examines a lawsuit filed by opponents of the proposed Keystone XL oil pipeline from Canada, asking a judge to force the U.S. government to turn over emails and other documents related to President Donald Trump’s approval of the project.
NATIONAL CANADIAN RETAIL GASOLINE PRICES AVERAGE 124.3 CENTS PER LITRE IN FEBRUARY As of February 27, the Canadian average retail regular gasoline price was 124.3 cents per litre, up from 109.5 cents per litre in February 2017, while the average retail diesel price hit 124.5 cents per litre, versus 110.4 for the same time last year, according to Kent Group Ltd. For more information and analytics, click here. INVESTORS BAIL ON LANDLOCKED CANADIAN OIL AS PIPELINE WOES DEEPEN This news piece looks at the recent challenges and hardship faced by Canada’s petroleum sector, and the resulting reaction from investors.
TRUDEAU’S ORWELLIAN LOGIC: WE REDUCE EMISSIONS BY INCREASING THEM This commentary by Mark Jaccard, professor at Simon Fraser University, examines Trudeau’s approach to addressing the contention between the expansion of Alberta’s oil sands and Canada’s national GHG promises, from the mindset of renowned English novelist, George Orwell. EDITORIAL: CO2 MEETS THE MARKET This editorial looks at cap and trade as a mechanism to reduce GHG emissions, following the February 16 announcement that the Nova Scotia government has set emission reporting requirements for companies whose greenhouse gas emissions will be capped in 2019. FOR NDP, SLOGANS HAVE CHANGED BUT CORE NARRATIVE REMAINS THE SAME This opinion piece examines Jagmeet Singh’s speech at the February 17 – 18 NDP convention, and his avoidance of discussing what the NDP’s approach to GHG emission reduction goals will be. VARCOE: CANADA HAS LOST $117B DUE TO PIPELINE WOES, SAYS MCKENNA This piece by Calgary Herald columnist Chris Varcoe, hones in on TD Bank deputy chair Frank McKenna’s standpoint on the nation’s economic self-interest in the Trans Mountain pipeline. THE GOVERNMENT OF CANADA OUTLINES NEXT STEPS IN CLEAN-ENERGY TRANSITION This press release outlines the details of the February 16 announcement made by Catherine McKenna concerning amendments to existing coal-fired electricity regulations, as well as new greenhouse gas regulations for natural gas-fired electricity. PRICE RALLY SPELLS FLEETING RELIEF FOR CANADIAN OIL PRODUCERS This article probes into the recent high rates of Canadian crude oil as compared to the U.S., exploring the reason for the price rally, and the nearterm outlook for Alberta oil producers. Canadian Independent Petroleum Marketers Association | Connection 2018 |
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WESTERN REGION
B.C. CAN’T STOP THE OIL, BUT IT SURE CAN SCREW WITH CANADA’S INTERESTS
This commentary examines the risks versus rewards of the Trans Mountain pipeline. OIL SANDS TECH TOUTED FOR PIPELINE CAPACITY BOOST STILL YEARS FROM DEPLOYMENT This news piece explores the idea of partial upgrading of bitumen from the Alberta oil sands to enhance value and free up more pipeline room for exports, highlighting a report funded by Alberta Innovates that will evaluate pre-commercial partial upgrading technologies. B.C. WINE INSTITUTE TO SEEK INJUNCTION ON ALBERTA’S BAN This article delves into the increasing tension between British Columbia and Alberta over the Trans Mountain project, as B.C.’s wine industry threatens to challenge the constitutionality of Alberta’s ban on B.C. wine imposed in early February 2018. PSAC URGING FEDERAL GOVERNMENT TO UPHOLD CANADIAN LAW IN ITS HANDLING OF KINDER MORGAN SITUATION This news story targets the recent release put out by the Petroleum Services Association of Canada, calling on the federal government to uphold the Canadian rule of law after B.C. announced its proposed ban on increased diluted bitumen shipments to the West Coast. ONE YEAR LATER: CARBON TAX EATING INTO BOTTOM LINE This feature looks at the impact of Alberta’s carbon tax on local farmers.
ONTARIO / QUÉBEC REGION
PATRICK BROWN DROPS OUT OF ONTARIO PC LEADERSHIP RACE This feature offers insight into the February 26 decision of the former Ontario PC leader to end his campaign to reclaim the position of head of party. ANDREW COYNE: A CARBON TAX IS COMING, NO MATTER WHAT ONTARIO PC CANDIDATES SAY This opinion piece explores the platforms held by Ontario PC leadership candidates, in regards to carbon tax in Ontario. MULRONEY COMES OUT AHEAD WITH 10 CONSERVATIVE CAUCUS ENDORSEMENTS IN ONTARIO PC LEADERSHIP RACE This news story offers a snapshot of the leadership hopefuls for the Ontario PC party, with Caroline Mulroney currently taking the lead in most recent caucus endorsements.
ATLANTIC REGION
N.L. UNVEILS PLAN TO DOUBLE OIL PRODUCTION BY 2030, SPEED UP DEVELOPMENT PROCESS This article looks at the new plan for growing the oil and gas sector, launched by the government of Newfoundland and Labrador on February 19. OPINION: MCNEIL SCUTTLES PROVINCE’S CLIMATECHANGE PROGRESS This open letter to Premier Stephen McNeil, penned by environmental consultant, Peggy Cameron, urges the province to jump-start changes that would prevent climate change, by increasing renewables for local use rather than export, importing hydro-electricity to replace existing coal-fired generating plants, and incentivizing regenerative agricultural practices.
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MEMBER UPDATES CIPMA CONNECTION | NEW MEMBERS
FULL MEMBERS
AFD PETROLEUM Established in 1989, AFD Petroleum is an independent supplier of bulk fuel, lubricants, and on-site tank storage systems to companies across western Canada, Texas, and Alaska.
ASSOCIATE MEMBERS
EASTWAY TANK, PUMP AND METER LIMITED Established in 1968, Eastway Tank, Pump and Meter Limited (Eastway Tank) is a custom manufacturer of tank trucks for both the North American and international markets.
EXP SERVICES INC. With a mission to understand, innovate, partner and deliver, EXP provides engineering, architecture, design and consulting services to the world’s built and natural environments.
S&P GLOBAL PLATTS S&P Global Platts is the leading independent provider of information, benchmark prices and analytics for the energy and commodities markets.
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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 2018 |