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October 1, 2015
This is the seventh and final feature celebrating the Co-op Refinery Complex's 80th anniversary.
If you ask most people where their water comes from, they are likely to say “the tap.” Likewise, if you were to ask people where the gas for their car comes from, they are likely to say “the gas station.” The process of getting your car’s gas to a Co-op gas station is a complex task overseen by Darren Hudema, Manager of Supply and Distribution at the Co-op Refinery Complex (CRC).
While Darren’s job today involves a lot of contracts and business negotiations, he didn’t start off that way.
“I have a degree in industrial systems engineering from the University of Regina. I’ve been with the CRC since 2001 and most of my time here has been on the operations engineering side. It’s just been the past two years that I’ve been dealing with the commercial and logistics side.”
So how does an engineer become involved in the CRC’s commercial operations?
“It’s actually not uncommon for people in my role to come from the engineering side. We need to understand a lot about the technicalities of how our facilities work. We are also involved in many of the aspects of our regulatory compliance, such as the federal and provincial legislation governing the amount of renewable fuels like ethanol and biodiesel we put in our products.”
Darren manages a complex distribution network that stretches from Vancouver Island to Manitoba and delivers over 15 million litres of gasoline and diesel fuel on a daily basis. The vast majority of gasoline and diesel that supplies all those gas stations comes directly from the facility in Regina. Getting all of that product from here to there is a complex undertaking.
“We have over 230 trucks that ship our products across Western Canada on a daily basis.”
In order to minimize both distribution costs and the environmental impact of trucking fuel, Darren and his team take advantage wherever they can of exchange agreements with other refiners.
“Basically we are just trading gas and diesel on paper instead of doing it by truck. Another refining or marketing company agrees to give us some of the products from their regional terminals and, in exchange, they can draw on our supplies for their Saskatchewan markets.”
Aside from the exchange agreements, another way the CRC can ship product is through pipelines.
“Over half of the product we supply to Manitoba is transported through the Enbridge pipeline system.”
But there is an important catch.
“We can’t use pipelines to supply our outlets in Alberta and B.C.”
For these reasons, Federated Co-operatives Limited invested approximately $175 million to build its new Carseland Terminal, located 60 kilometres east of Calgary, Alta.
“This facility has the capacity to hold 142 million litres of finished product. We have a fleet of over 300 railcars we use to ship gasoline and diesel from Regina to the new terminal. Until recently, we were running 30 trucks a day just to service the needs of retailers in the Calgary and southern Alberta area. Taking these trucks off the road will reduce our environmental impact, provide modest cost savings and put us in a better position to supply the Alberta and British Columbia markets.”
It will also boost the CRC’s storage of finished product, which Darren says had grown very tight in recent years at the Co-op’s Regina terminals.
Ultimately, even the complexity of the Refinery’s distribution market comes back to its grassroots origins serving Saskatchewan farmers.
“One of the big benefits we will get across Western Canada from our Carseland Terminal will be an improvement in our ability to manage our diesel inventory, which will have a positive impact on our ability to support agriculture. The period of heaviest diesel use in Western Canada is during spring seeding and the fall harvest. Our new storage facility will allow us to stockpile diesel during periods of lower demand so that we have ample supplies when the farmers need it in the spring and fall.”