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Greater Vancouver Board of Trade President and CEO Bridgitte Anderson speaks with Parkland Corporation Senior Vice President of Supply, Trading and Refining Ryan Krogmeier about a massive investment in their Burnaby refinery.
GVPOD is the podcast of the Greater Vancouver Board of Trade. President and CEO Bridgitte Anderson talks to leaders in the business community about the challenges and opportunities they experience, as well as issues impacting our region.
0:00:00 S1: [BRIDGITTE]Welcome to GVPOD, Greater Vancouver's business podcast, exploring the challenges and opportunities facing our region. My name is Bridgitte Anderson and I'm President and CEO of the Greater Vancouver Board of Trade. You know, there are a lot of companies that provide critical services we rely on, but don't really have much name recognition. One of those companies is Parkland. They're a Calgary-based company that supplies fuel and petroleum products across Canada. In 2017, they purchased the Burnaby Refinery and they're making a big investment in that refinery. Today, I'm speaking with their Senior Vice President of Refinery, Ryan Krogmeier. Hi, Ryan.
[Ryan] Good morning, Bridgitte. Thank you for having me.
0:00:42 S1: [BRIDGITTE] The Burnaby Refinery is one of Canada's only remaining West Coast refineries and it provides a quarter of BC's transportation, gasoline and diesel. But what other products does the refinery provide?
0:01:06 S2: [RYAN] Well, in addition to gasoline and diesel, it's also a critical supplier of jet fuel to the Vancouver International Airport. It also supplies the fuels that are needed by the marine sector. So that is to the vessels calling on the Port of Vancouver and the surrounding areas. And we also produce LPG, for example, which goes into heating people's homes and providing gas for cooking.
0:01:37 S1: [BRIDGITTE] And I should be clear that Parkland is not to blame for the high gas prices. There's a lot of issues going on in the market.
0:01:45 S2: [RYAN] Yes, no, there are a lot of issues going on in the market right now, Bridgitte. And, you know, just to name probably the leading challenge at the moment is along the West Coast, down all the way to Los Angeles. We've had a few refinery outages, which has caused some pressure here on gasoline and diesel prices over the last week or so. And of course, we operate in a global competitive market. And those events, when we are already, I'll call it tight on supply demand balances, can have an effect, a temporary effect of pushing prices upwards.
0:02:36 S1: [BRIDGITTE]And let's hope it's temporary and those prices come back down. Nor am I going to put you on the hook for the taxes and the gasoline. What I really wanted to talk to you about is the investment that Parkland is making. It's a massive investment, about 600 million dollars in the Burnaby refinery. So talk to us about what that investment will entail.
0:02:58 S2: [RYAN] Yeah, we are very excited about the investment. And I do want to start off by saying I think it's a great example of what we can achieve when we work together as government and private to really achieve those goals that are set out in Canada's climate objectives and in British Columbia's climate objectives over the next 20 to 30 years. So the investment, Bridgitte, that we are going to make here at Burnaby is to build on our track record of innovation and leadership. The first thing we're going to do is expand our co-processing volume. So that is where we co-process in an existing unit. Today at the refinery, we co-process in two units. We will expand that activity by up to 5,500 barrels per day. So that's one piece of that investment that you mentioned. The other piece is a standalone renewable diesel complex. That's within the Burnaby refinery area, and that plant will be capable of producing approximately 6,500 barrels per day of renewable diesel.
0:04:32 S1: [BRIDGITTE] And what would be the purpose for renewable diesel? Where is it used?
0:04:39 S2: [RYAN] Renewable diesel, one of the advantages of renewable diesel is that it's what we call a drop in fuel. So it can go into existing light and heavy duty vehicles. It does not need any new infrastructure to transport it. And it's fungible or substitutes for conventional diesel and into farmers tractors, into those delivery vans that bring your Amazon packages to your doorstep, into the locomotives that bring all the train traffic across the country, and those heavy-duty vehicles as well as off-road vehicles like bulldozers and graders, all those things that diesel is used for, renewable diesel can go straight into the use or application for all of those vehicles. Again, and it's very economic to use existing infrastructure as opposed to having to invest in new infrastructure, which can be quite capital intensive.
0:06:00 S1: [BRIDGITTE]And what's the source of the renewable diesel then? Go ahead.
0:06:06 S2: [RYAN] Yeah, in terms of feedstocks, the feedstocks that we use are what we call low carbon intensity feedstocks. And those are primarily made up of what we call animal fats. So that includes used cooking oil, it can include tallow from rendering beef, pork, et cetera. We also use fish oils. The other large category of those low carbon feedstocks comes from canola oil in Canada. So we currently co-process canola oil at our refinery, and we will be using that canola oil as we go forward to make more renewable diesel and more renewable products overall. One other exciting area of bio feedstocks is in forestry residue. So we currently process tall oil, which is a byproduct of the pulp and paper mill process in our refinery today. And this is where, of course, our refinery in Vancouver is sitting in right in the middle, if you will, of one of the largest forestry industries in the world. And also one of the largest fishing industries in the world. So we're quite excited about the prospect of taking these, what otherwise would have been waste streams, into the refinery and manufacturing these low carbon intensity fuels that we'll need for the future.
0:07:52 S1: [BRIDGITTE]Where does the project stand now? My understanding is that there is a request in for some federal funding. Where does that stand?
0:08:02 S2: [RYAN] Yes, that's correct. We are continuing to work with several federal agencies to really advance that opportunity to obtain the funding that we need to move forward. Aside from that, we continue to advance the project as we move through what we call front end engineering and design work. And we are doing that. And of course, that takes a great deal of partnership with many engineering firms, but also with many local stakeholders in the Burnaby and the Vancouver area. And we continue to work with the First Nations as well to socialize and understand the benefits of the project for the community.
[Bridgitte] So is it safe to say, Ryan, that you're at the beginning stages of this project, understanding you need federal funding and you're in discussions with some of the Indigenous communities?
[Ryan] It is fair to say that we have advanced the technical aspects of the project quite a long ways. That's of course related to engineering and process technology. And those conversations with the Indigenous groups, with the federal governments, are at stages that are good spots for us. In other words, they are advanced and advancing. And we're quite pleased with where we're at on our timeline for moving through the project.
0:09:54 S1: [BRIDGITTE]You know, there's been a lot of focus on Canada's role in the energy sector globally, given concerns about energy security because of Russia's invasion of Ukraine. It seemed that Canada has a big opportunity to play a larger role if a number of conditions were met. One is requiring more production, whether it's in oil or it's in renewable fuels, and also infrastructure. Where do you see Canada's role given the kind of geopolitical friction that exists right now?
0:10:31 S2: [RYAN] Well, I think Canada has a very big role to play. And Canada has all of the foundational elements that will make it a successful supplier of conventional as well as renewable fuels and low carbon fuels to the rest of the world. And so when we talk about what those fuels look like, as we all know, Canada is blessed with an abundance of conventional crude oil resources, which include low carb, lower carbon fuels like natural gas and liquefied petroleum gases. And it is great to see over the past several months, several LNG projects moving forward, or it looks like they are moving forward. So LNG is certainly an area where I believe Canada could be a large supplier to the rest of the world. And we all know the winter that Europe is facing here down potentially. And again, I think Canada could be a large part of that solution going forward. Now it will take obviously years for those projects to get completed and that LNG to come onto the market. But that has to happen. And those projects, a large part of them depends on infrastructure, as you mentioned, Bridgitte, and a large timeline for permitting for Indigenous engagements. And if we can streamline some of those processes and work them in parallel as opposed to sequentially with one another, these projects which are valuable to the world can be brought online faster. I would also say that in addition to LNG and crude oil and liquefied petroleum gases, renewable fuels in the future. Canada, again, is blessed with immense natural resources. So let's talk about hydrogen. As we all know, the German Chancellor was here in Canada.
[Bridgitte] Well, he was here in Canada. He didn't come to British Columbia.
0:12:54 S2: [RYAN] He did not. But he was here in Canada. And I think there is a, you know, a willingness to look down the horizon in the long term at hydrogen as a clean source of energy. But from my perspective, hydrogen is well into the future. It is not a viable solution at scale, at commercial scale for the next 20 to 25 years. There's a lot of technology and infrastructure that has to get built out. But let's talk about British Columbia. And let's talk about renewable fuels.
0:13:30 S1: [BRIDGITTE]I think CEC has got such an important role to play in this. And Ryan, it does amaze me that these are tough conversations to have when it should be a yes and conversation. You know, there's a role for Canada to play and British Columbia to play while we are also addressing climate change and Indigenous reconciliation. And these conversations around energy and energy production seem to be rife with all kinds of emotion quite often.
0:14:02 S2: [RYAN] Yes, absolutely. And British Columbia, again, has such a big role to play. And it's not a binary outcome. This is not, you know, clean energy or no clean energy, dirty energy or not. This is an and world that we live in. And it's important to take all forms of energy to be able to meet those climate goals that we have set out and to do it in a responsible way that also takes into account the economic impacts that those choices will have on citizens and on consumers. And again, I go to British Columbia where all of these natural resources – forestry, fishing, lots of hydro electric power generation ability, it would be a shame to squander those resources and we have to find a pathway collectively and get focused. It is not just going to be one group, one organization, one investor that is going to be able to do it. We have to get focused as a society and participants in our communities to chart the course going forward and to remove as much emotion, from the discussion, as we possible can, so that we can get facts-based. We have to face society’s reality which is – we need lower carbon intensity fuel solutions, but we need to develop them economically. We need to keep in mind the impact it all has on our communities going forward.
0:16:03 S1: [BRIDGITTE] Could not agree more strongly and this investment that Parkland is making in the Burnaby Refinery is a great example of that. So as we wrap up the conversation, just a couple more logistical questions around the project. We are talking about a number of jobs being created so what is the timeline for this project.
0:16:18 S2: [RYAN] So we're on a timeline right now that would look like startup of operations, somewhere in the first half of 2027. And so in that process as you said Bridgitte we will create, you know, several hundred construction jobs over the next several years and then of course once the plant is constructed and operational, there will be dozens of permanent jobs. And I might add these are, these are good paying jobs. You know these take trade and vocational workers who are very, very skilled, along with some that are unskilled and provide much needed jobs for the community at good wages. And, you know, we're excited to work with the local trade unions and councils etc to bring those jobs to Vancouver.
0:17:24 S1: [BRIDGITTE] Well, we are grateful that you've taken a few minutes to talk to us about the project it sounds like a really exciting investment and wishing you all the best with it Ryan thanks for taking some time today.
0:17:35 S2: [RYAN] Thank you for having me Bridgitte.