1

International Exports and Imports of gasoline and diesel from

Port Metro Vancouver

Submission by interveners Robyn Allan and Marc Eliesen on the need for reliable export and import data discussed

at the Oral Workshop, including Port Metro Vancouver source data on foreign exports and imports, as requested.

An increase in foreign imports does not necessarily mean that higher cost refined products are

being imported or there is a reliance on US markets for supply. Reliable export data is critical as

is an understanding of the contractual relationships between the sellers of international supply

and the purchasers of international supply.

It has been publicly acknowledged by Parkland that Parkland and Chevron have entered into

long term agreements for Chevron to supply refined product BC Chevron stations—formerly

owned by Chevron and now owned by Parkland.

Further, Shell owns a refinery in Washington State but there is no evidence on the public record

that identifies Shell’s sourcing of refined product from its refinery, although Shell has confirmed

that it imports gasoline from ‘refiners’ in the Pacific Northwest. If Shell does source supply from

its US refinery—which is likely—it would be expected to do so under favourable commercial

terms facilitated when an operation is integrated. That is, Shell sourcing supply from its US

refinery would be expected to deliver a low-cost barrel relative to alternatives.

There are serious concerns over the veracity of the Department of Finance data that Deetken has

relied on, not only because this is the first instance where this data has been been used for this

purpose—as well as it being the first time Deetken has done so—it is not a publicly available

data set.

Given the serious time constraints the Inquiry is under, proper scrutiny of the data Deetken has

relied on has been frustrated. Many conclusions seem to be being drawn from the data by various

interveners while there is contradictory data, such as Port Metro Vancouver and the US Energy

Information Agency (EIA) that is available and leads to quite different conclusions. The data

contradicting the Department of Finance data is both reliable and publicly available.

Port Metro Vancouver has consistently collected international export and import data, and

reported it on a monthly basis, for years. It is unclear why Deetken did not seek to obtain this

data but has relied upon Department of Finance data that is untried.

Chart 1 provides a summary of foreign imports and exports of gasoline and diesel through Port

Metro Vancouver from 2015 to 2019. The data bases relied on to generate this table have been

included as part of this submission.

C1-5

ylapierrInquiry into Gasoline and Diesel Prices in BC

2

Chart 1

There is a substantial difference between the export data from PMV and that provided by

Deetken during the Oral Workshop. This discrepancy alone raises serious questions regarding

Department of Finance data, as mentioned above. It should be noted that a source of the

discrepancy may be related to the fact that Port Metro Vancouver data is based on volume

whereas Department of Finance data is based on value. As Deetken explained in its data

disclaimer provided in Phase 1, Department of Finance data is used for taxation purposes and

therefore required ‘adjustments to approximate total volumes.’

Since there is no evidence that indicates any meaningful volume of international rail imports or

exports of refined product to or from the US, it can be assumed that the majority of international

trade for gasoline and diesel is conducted through the Port of Vancouver

Evidence indicates that long-term, mutually beneficial arrangements have been entered

into between Parkland and Chevron for foreign imports.

“So three things (to ensure no shortage of supply during planned maintenance) one is we do

build up some inventory. The second is we will look to our refining partners to assist. And then

the third is import. We also do have an ongoing supply relationship with Chevron and they

will be assisting us through that.”1 Parkland CEO, Bob Espey (emphasis added)

1 Parkland Quarter 3 Results, Earnings Call, November 3, 2017, Seeking Alpha.

3

The Deetken Report, Phase 1, identifies an increase in international imports of gasoline and

diesel from PADD 3.

Source: Screenshot, Deetken Phase 1, page 12.

During the Oral Workshop, reference to foreign sourced imports from PADD 3 has been made

by parties as if they are being delivered from the Gulf Coast. However, in addition to there being

a concern over the veracity of Ministry of Finance data to represent the volume of imports and

exports (export data supplied by Deetken suggesting far less exported than Port Metro

Vancouver international export data indicates), there is some concern over the reliability of the

source of imports in the data because the data is reported on the basis of office-of-the-order-

placed rather than the refinery where the product is produced. Thus, the data may suggest PADD

3 exports when they are not coming from PADD 3.

For example, Chevron—with refined product supply agreements in place with Parkland—has its

head office in Texas, although Chevron manages refined product supply through California and

other geographic locations. Depending upon how orders are reported on Ministry of Finance

data, this could mean that what have been identified as PADD 3 shipments are not coming from

PADD 3. Deetken agreed at the Oral Hearing to look into source of supply reliability in the data.

However, it is useful to note that part or all of the increase in US imports may be due to mutually

beneficial business arrangements between Parkland and Chevron. That is, the trade data may not

reflect arms-length spot transactions, but mutually beneficial long-term arrangements, with

Chevron supplying refined product to what are now Parkland’s Chevron retail outlets.

Determining the volume of product imported and exported by Parkland, by market, over the

period 2015 – 2019 is critical in this regard. The discussion that follows is relying on limited

publicly available information, albeit supported by an understanding the authors have of business

4

negotiations and the financial benefits of entering into ongoing supply arrangements that on the

surface may suggest supply constrains when they do not because they represent profit

maximization for the companies involved in the supply arrangements. That is, enhanced business

returns and not lack of domestic supply can and likely does result in supply being sourced from

what appear to be increasingly distant foreign markets.

Interveners have suggested that PADD 3 sourced refined product is more expensive than local,

when this may not be the case. Notwithstanding that the marginal barrel argument is invalid in

all but a perfectly competitive market, it has been repeatedly suggested that the transportation

costs are driving refining margins, when in fact delivered barrels from PADD 3 or PADD 2

could be less expensive because of mutually beneficial import and export arrangements between

‘partners.’

Assuming Parkland is importing product from Chevron in the US as per long-term agreements,

then an increase in imports from PADD 3 would be explained as having little or nothing to do

with lack of supply from Alberta, but as a result of lower cost options for Parkland. (Again,

assuming the data properly represents PADD 3 deliveries as actually being sourced in PADD 3).

There is no question that gasoline produced in BC declined in 2018 as compared with 2017 since

Parkland’s refinery maintenance shutdown meant a reduction in overall annual capacity

utilization. The data suggests the shortfall was made up through foreign imports, but this does

not mean it could not have been made up, at least in part, by Parkland itself.

According to trade data as reported by Platts, in January 2018, Parkland exported 180,000 barrels

of refined product to Washington State just prior to the shutdown. What we do know is that

Parkland has an ongoing gasoline and diesel supply arrangement with Chevron which may

explain why the exports occur. Since both parties are sophisticated companies the supply

arrangements would be expected to be mutually beneficial in financial terms.

It is interesting to note that in his statement to analysts, Mr. Espey does not consider other

refiners as competitors, but as ‘partners.’

Chevron’s remaining refineries, from which it appears Parkland has an agreement to source

supply, are all located in the US. Chevron’s four U.S. refineries have the combined capacity to

process 932,000 barrels of oil per day. Refineries are in Richmond and El Segundo, California;

North Salt Lake, Utah; and Pascagoula, Mississippi. In January 2019, Chevron acquired a

refinery in Pasadena, Texas.2

Chevron also has a fleet of US and internationally flagged tankers and relies on its trading

operations to ensure its refined product is marketed. “Chevron’s Supply and Trading

organization provides a critical link between Chevron’s Upstream and Downstream operations.

Headquartered in Houston, Texas, with additional trading hubs in London, Singapore and San

2 Chevron Website. https://www.chevron.com/worldwide/united-states

https://www.chevron.com/worldwide/united-stateshttps://www.chevron.com/worldwide/united-states

5

Ramon, California, it provides commercial support for crude oil and natural gas production

operations and our refining and marketing network.” 3

Chevron has significant business incentives to create a global network and lock down ongoing

markets in which it can sell its refined product. In electing to sell its operations in BC, the

company likely would have built its strategy into its negotiations. Perhaps the terms of the

purchase price for the assets reflect the benefit in the long-term arrangement for Chevon’s

product since a higher price for refined product would be passed on in the BC market given the

extremely high refinery margins compared to other markets.

The terms of the ongoing supply agreement between Parkland and Chevron means that purchases

of gasoline and diesel from Chevron are very likely lower than the price Parkland faces as its

next best alternative for those volumes—and may even at times be better than the pricing of its

BC produced product given the instances where Parkland has exported gasoline and diesel, even

adjusting for transportation.

It is critical that if trade data is to be relied upon it be accurate and reliable and that the business

relationships underlying the trade are appreciated. Otherwise false conclusions will be drawn

regarding the ‘marginal’ barrel, supply ‘dependence’ on foreign markets, degree of market

concentration (assumed competitive and price determined in the spot market when the market is

highly concentrated and price is imbedded in long-term contracts between ‘partners’ mutually

beneficial to both parties while wholesale price charged reflects excess profits) and impact of

import barrels on generating a need for wider margins, when they do not.

3 Ibid.

6

Port Metro Vancouver Data Foreign Imports and Exports

The annualized volumes for foreign imports and exports relied upon in the Allan and Eliesen

Report was obtained through a special request to Port Metro Vancouver thereby ensuring only

international trade figures were relied upon (see bottom two categories in table below: Foreign

Import, Diesel and Fuel Oils, and Gasoline and Foreign Export, Diesel and Fuel Oils, and

Gasoline) The metric tonne volumes were converted into barrels relying on CME conversion

calculator for gasoline, and the separate calculator for diesel available at

https://www.cmegroup.com/tools-information/calc_refined.html

It should be noted that the monthly data for 2019 relied upon by Allan and Eliesen is bulk data

since PMV had not finalized the figures for 2019 when the data was requested, however, PMV

has confirmed that bulk traffic data is “most of the volume of petroleum products.”

Table 1

Monthly data from 2008 – 2019 is provided in the attachment panel of this submission as

requested.

https://www.cmegroup.com/tools-information/calc_refined.html

Export Summary

This document was exported from Numbers. Each table was converted to an Excel worksheet. All other objects on each Numbers sheet were placed on separate worksheets. Please be aware that formula calculations may differ in Excel.

Numbers Sheet NameNumbers Table NameExcel Worksheet Name

IMPORT

Table 1IMPORT

EXPORT

Table 1EXPORT

IMPORT

EXPORT

IMPORT

Bulk Import Gasoline & Diesel Summary by Year, Month, Direction and Origin

2008 to YTD April 2019 in Metric Tonnes

20082008 Total20092009 Total20102010 Total20112011 Total20122012 Total20132013 Total20142014 Total20152015 Total20162016 Total20172017 Total20182018 Total2019

ORIGIN1234567891011121234567891011123456789101112123456789101112123456789101112123456789101112123456789101112123456789101112123456789101112123456789101112123456789101112124

IMPORT7,93775,263189,838208,71175,83781,714145,003161,484136,220245,082129,05628,8791,485,02436,948121,50747,179131,26559,395144,449133,167180,441109,03392,30829,7251,085,41741,59043,31855,741180,274179,705150,547136,56053,845100,196143,37828,17021,2531,134,57650,32754,215105,75176,50880,239154,62391,82084,60061,81188,66745,12628,676922,36118,21920,73911,13195,12091,383168,710118,82054,04455,48958,04421,41840,699753,81363,36066,559212,68979,994135,653124,354120,928102,07189,791121,04154,32370,7331,241,49462,52553,90332,81248,02677,077121,29469,13160,972104,12849,11761,45374,986815,42571,05245,35498,83966,41372,08790,70874,876184,042125,58087,24342,29244,5941,003,08041,05456,20833,03046,656106,709253,884129,38055,70469,65255,41838,18239,641925,51830,52024,44437,34969,98641,11940,02560,22670,94846,51912,9587,28719,986461,36522,412108,931169,239175,354137,886162,53248,33069,80044,19325,85524,3769,761998,66955,65325,46756,217

Diesel & Fuel Oils7,93728,76859,30247,70216,73829,20435,73417,72123,14940,81136,7609,283353,1076,1163,99279115,0503,3799,4749,56748,36916,41217,81424,4487,48715,06925,49246,716153,43912,06310,06229,23320,42723,16725,5606,48820,92856,10416,6795,921226,63113,46921,1103,07721,2948,61318,3999,26295,22424,26918,52688,95247,06137,03437,58231,37733,86950,44877,09228,03725,114499,36221,77520,48915,75511,00322,75663,0257,9548,57445,62115,89214,85839,579287,28038,86713,26142,96926,26016,81250,72128,56223,18833,3193,1771,270278,40812,28210,86230,90163,26749,13218,86028,72713,4604,9386,608239,0383,79711,0674,40827,54014,1539,9353,9082,6508,92786,3853,38239,980103,99341,92918,32414,2234,344226,17430,53638,380

Chile10,88010,880

China15,35715,35722,89122,8919,8659,865

Japan17,48217,482

Korea (South)9,5809,5802,5672,567

Mexico9,9279,9274,3584,358

Netherlands9,2866,61115,896

Singapore3,4162,7469687,12910,5436,2948,1922,34327,3711,2421,242

United States7,93728,76859,30247,70216,73829,20435,73417,72123,14940,81136,7609,283353,1076,1163,99279115,0503,3799,4749,56748,36916,41217,81424,4487,48715,06915,91246,716143,85912,06310,06229,23320,42723,16725,5606,48820,92856,10416,6795,921226,63113,46921,1103,07721,2948,61318,3999,26295,22424,26918,52685,53647,06137,03428,29722,02133,86934,12377,09228,03725,114460,97921,77520,4895,2124,71022,75654,8347,9546,23145,62115,89214,85839,579259,90938,86713,26142,96912,81316,81250,72118,63523,18810,4273,1771,270232,14212,28210,86230,90163,26749,13218,86028,72713,4604,9386,608239,0383,79711,0674,40827,54014,1539,9352,6662,6508,92785,1433,38239,980103,99324,44718,3244,344194,46930,53638,380

Gasoline46,495130,536161,01059,09952,510109,269143,763113,071204,27192,29619,5961,131,91736,948115,39147,179127,27358,604129,399129,788180,441109,03382,83420,1581,037,04841,59043,31855,741163,862161,891126,099129,07338,77674,70496,66228,17021,253981,13850,32742,15395,68947,27559,812131,45666,26078,11240,88332,56328,44622,755695,7304,75020,73911,13174,01088,307147,416110,20654,04455,48939,64521,41831,437658,58939,09148,033123,73732,93398,61986,77289,55168,20139,34343,94826,28645,619742,13240,75133,41417,05737,02254,32158,26961,17752,39958,50833,22646,59535,408528,14532,18532,09355,87040,15355,27539,98646,314160,854125,58053,92439,11443,324724,67241,05443,92633,03035,79475,809190,61780,24936,84440,92441,95733,24433,033686,48026,72313,37632,94142,44641,11940,02546,07361,01342,61110,3087,28711,059374,98019,03068,95265,246133,425119,561148,30948,33065,45744,19325,85524,3769,761772,49525,11725,46717,837

Aruba21,60121,601

Bahamas29,28029,280

France36,75736,757

Japan21,03021,03034,10634,106

Korea (South)32,09535,69732,01699,80815,46765,15925,66352,181158,47059,97832,4009,095101,47335,03535,03511,36928,98840,35714,61514,61526,03826,03817,29117,291

Netherlands32,09632,096

Norway31,37731,377

Singapore23,41923,41935,21435,214

Spain30,69530,69518,30418,30430,01330,013

Sweden37,58337,583

Taiwan29,78529,785

United States46,49570,056107,88559,09952,510109,269108,06681,055204,27192,29619,596950,59936,94841,05147,179111,80658,604105,98064,629123,40156,85282,83420,158749,44241,59043,31855,741103,884129,491126,09976,66329,68174,70496,66228,17021,253827,25550,32742,15395,68947,27559,81296,42166,26078,11240,88332,56328,44622,755660,6954,75020,73911,13162,64188,307147,416110,20654,04426,50139,64521,41831,437618,23239,09148,033123,73732,93368,60665,17174,93668,20139,34343,94826,28645,619675,90340,75133,41417,05737,02254,32158,26961,17752,39958,50833,22646,59535,408528,14532,18532,09355,87040,15355,27539,98646,314131,574125,58053,92439,11443,324695,39241,05443,92633,03035,79475,809164,57980,24936,84440,92441,95733,24433,033660,44226,72313,37632,94142,44641,11940,02546,07361,01342,61110,3087,28711,059374,98019,03068,95265,24698,21170,174148,30948,33065,45744,19325,85524,3769,761687,89425,11725,46717,837

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EXPORT

Bulk Export Gasoline & Diesel Summary by Year, Month, Direction and Destination

2008 to YTD April 2019 in Metric Tonnes

20082008 Total20092009 Total20102010 Total20112011 Total20122012 Total20132013 Total20142014 Total20152015 Total20162016 Total20172017 Total20182018 Total2019

DESTINATION1234567891012123456789101112123456789101112123457891011121234567891011121234567891011121234567891011121234567891011121234567891011121234567891011121234567891011121234

Load from facility10,46116,36329,83022,74621,29928,77431,59511,43823,6785,26517,627219,07428,46721,58239,81922,81328,69922,32319,06021,75628,38827,93418,73652,544332,12113,31118,19228,00824,51235,25529,28339,42043,94910,13624,98923,06958,453348,57737,81327,46515,34069,53232,59046,34938,57844,28230,29643,00340,129425,37863,09752,46065,49155,97234,88337,92526,94045,85921,98437,98645,78443,639532,02259,72967,17142,30459,74246,44148,16442,35938,29650,06534,00283,38779,448651,10967,19457,79762,82156,26255,47145,71270,55475,76368,18185,72693,017130,441868,940106,18037,7665,35452,020120,34571,72984,41782,19677,73573,14480,60581,693873,183120,714127,85890,820124,900111,092131,38791,25599,04789,241106,21697,960154,3751,344,866100,04878,732106,23179,53978,42596,557117,515116,372128,459118,81793,732106,4971,220,92252,77340,13849,72845,54932,41892,86666,95193,10074,38793,35242,10775,691759,06090,07659,94453,77459,949

Diesel & Fuel Oils7,57714,0438,0619,65417,53327,50219,4087,04113,7625,26517,627147,47122,64010,61214,6237,79210,6695,5246,47615,96911,9394,22424,504134,9725,80511,30421,58220,76815,20813,64714,58210,39318,421131,7119,0335,65919,7368,1997,1687,52211,35722,43117,07520,652128,83320,0358,5289,94525,95616,6928,45511,08928,73011,3267,5965,33312,630166,3149,50726,15428,93029,38724,02117,92812,60521,36016,67112,00029,61530,621258,80026,59231,31228,32915,17020,69821,35743,15740,71740,14645,45940,39368,650421,98131,97711,3515,35419,45432,25629,39841,01435,98036,28541,07544,80433,493362,44170,11347,25733,35862,76334,67242,11131,50055,11438,22158,11945,27673,754592,25848,72517,91863,13223,37932,12345,05364,01161,48077,23269,17941,29027,995571,51725,38032,65049,72841,57821,16460,56837,20662,34664,31780,21130,76864,854570,77067,59442,67153,77449,395

Chile9,5309,530

Ecuador6,4386,438

Guatemala7,6557,65511,40411,404

Mexico8,06319,71627,779

Puerto Rico14,951

United States7,57714,0438,0619,65417,53327,50219,4087,04113,7625,2659,972139,81622,64010,6125,0937,79210,6695,5246,47615,96911,9394,22418,066119,0045,80511,30421,58220,76815,20813,64714,58210,39318,421131,7119,0335,65919,7368,1997,1687,52211,35722,43117,07520,652128,83320,0358,5289,94525,95616,6928,45511,08928,73011,3267,5965,33312,630166,3149,50726,15428,93029,38724,02117,92812,60521,36016,67112,00029,61530,621258,80026,59231,31216,92615,17020,69821,35743,15740,71740,14645,45940,39368,650410,57731,97711,3515,35419,45432,25629,39841,01435,98036,28541,07544,80433,493362,44170,11347,25733,35862,76334,67242,11131,50055,11438,22158,11945,27673,754592,25848,72517,91863,13223,37924,06045,05364,01161,48077,23249,46241,29027,995543,73725,38032,65049,72841,57821,16460,56837,20662,34664,31780,21130,76864,854570,77067,59442,67138,82349,395

Gasoline2,8842,32021,76913,0923,7661,27212,1874,3979,91671,6035,82710,97025,19615,02118,03016,80012,5845,78716,44927,93414,51228,040197,14913,31112,38616,7042,93114,48729,28324,21230,30210,13610,40612,67740,031216,86628,78021,80615,34049,79724,39139,18131,05632,9257,86525,92719,477296,54543,06343,93355,54630,01718,19129,47115,85117,12910,65830,39040,45131,009365,70850,22241,01713,37430,35522,42030,23629,75316,93633,39322,00253,77348,827392,30940,60126,48534,49241,09234,77424,35527,39635,04628,03640,26752,62461,791446,95974,20326,41532,56688,08942,33143,40346,21641,45032,07035,80148,200510,74250,60180,60157,46262,13776,42089,27659,75543,93451,02048,09852,68380,621752,60851,32360,81443,09956,16046,30251,50453,50454,89251,22649,63852,44278,502649,40627,3937,4893,97111,25432,29829,74530,75410,07013,14111,33810,837188,29022,48217,27310,554

Puerto Rico19,17219,172

United States2,8842,32021,76913,0923,7661,27212,1874,3979,91671,6035,82710,97025,19615,02118,03016,80012,5845,78716,44927,93414,51228,040197,14913,31112,38616,7042,93114,48729,28324,21230,30210,13610,40612,67740,031216,86628,78021,80615,34049,79724,39139,18131,05632,9257,86525,92719,477296,54543,06343,93355,54630,01718,19129,47115,85117,12910,65830,39040,45131,009365,70850,22241,01713,37430,35522,42030,23629,75316,93633,39322,00253,77348,827392,30940,60126,48534,49241,09234,77424,35527,39635,04628,03640,26752,62461,791446,95955,03126,41532,56688,08942,33143,40346,21641,45032,07035,80148,200491,57050,60180,60157,46262,13776,42089,27659,75543,93451,02048,09852,68380,621752,60851,32360,81443,09956,16046,30251,50453,50454,89251,22649,63852,44278,502649,40627,3937,4893,97111,25432,29829,74530,75410,07013,14111,33810,837188,29022,48217,27310,554

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