Pipeline explosion could cause spike in fuel prices, analyst says
Published Thursday, October 11, 2018 9:58AM PDT
Last Updated Thursday, October 11, 2018 12:29PM PDT
The pipeline explosion that has limited the flow of natural gas into B.C. is also expected to send fuel prices soaring this week, according to analysts.
Dan McTeague of GasBuddy.com said drivers in Metro Vancouver can expected to see prices at the pumps increase by about four cents on Friday, which would bring the average price to around 161.9 cents per litre.
That's because the refineries in Burnaby and Washington state rely on natural gas for their production.
"The reality is that most refineries need natural gas to translate oil into gasoline, diesel, jet fuel and other products," McTeague said. "There will be some discomfort at the gas pumps, simply because refineries have indicated … that they'll have to curtail their output temporarily until this matter is resolved."
Two Enbridge pipelines – a 36-inch line and a 30-inch line – were shut down in the wake of Tuesday's explosion. FortisBC said the pair supply about 85 per cent of the province's natural gas, creating serious concerns about a shortage that could leave hundreds of thousands of people without service.
On Thursday, FortisBC announced that the smaller pipeline, which was only turned off as a precaution, is back online, though the utility cautioned that natural gas users aren't out of the woods yet.
"Gas supply will continue to be constrained until the 36-inch gas line is repaired. As a result, FortisBC is asking customers to avoid non-essential use of gas until the situation is completely resolved," the utility said in an update.
If supply issues aren't addressed soon, McTeague said Metro Vancouver motorists could see another four cent spike on Saturday, which would bring gas prices into the 165.9 cent range.
"Of course, that would be an all-time high," McTeague said. "In the meantime, we have cautioned everyone not to panic. This looks like a temporary situation, which might get (resolved) sooner than later."
On Wednesday, FortisBC warned that up to 70 per cent of its one million customers could face shortages as a result of the explosion, and urged people to limit the use of fireplaces, barbecues, hot water and home heating.
The utility said overall use across the province only decreased by 20 per cent that day, despite its pleas.
Tuesday's blast shook nearby homes, and forced the temporary evacuation of about 100 people from the Lheidli T'enneh First Nation. The cause hasn't been determined, but the RCMP announced Thursday that it's found "no indications that the explosion was criminal in nature."
As a result, the investigation has been turned over to the Transportation Safety Board, which is being aided by the National Energy Board and Enbridge.
With files from CTV Vancouver's Sheila Scott
GasBuddy still expecting 4 cent gas price jump tomorrow. And possibly another on Saturday which would take Metro Vancouver to the 165 range.m — possibly an all time high. The length of the increase depends how long it takes to get both natural gas lines back to capacity. pic.twitter.com/oaKF9HoKSU— Sheila Scott (@Sheila_Scott) October 11, 2018