Shell expands Mackay diesel terminal

Shell has continued its expansion efforts in Mackay after unveiling a $5 million project which includes an additional diesel loading gantry.

The commissioning of a larger and fully-automated diesel loading gantry has allowed Shell to extend availability of Shell Diesel Extra to Mackay.

The project follows the launch of two new diesel tanks at Mackay last July, which increased diesel storage capacity at the terminal by 38 million litres.

The $5M expansion project involved the construction of an additional gantry bay dedicated to diesel supply and specific dosing equipment to allow the supply of Shell Diesel Extra.

With four fuel-loading arms capable of loading various diesel products simultaneously, and configuration to allow B-double access, it significantly increases the loading capacity

“The new gantry will load a B-double in 15 minutes, compared to 25 minutes in the existing bay,” said Scott Wyatt, Shell’s general manager, supply and distribution.

“This gives us a 40% quicker turnaround, effectively reducing congestion and waiting times in and around the terminal,” he said.

“This state of the art facility will improve and accelerate the distribution of Shell diesel products to our customers throughout the greater Mackay region, and it also gives Shell better ability to respond to demand peaks,” said Wyatt.

The investment in new infrastructure and storage aims to meet the growing customer demand for diesel in the Bowen Basin region.

Shell Australia launches new biodiesel facility in Western Sydney

Shell Australia today launched a new biodiesel facility at its Parramatta terminal to supply its Biodiesel 20 (B20) product to the New South Wales market.

Shell’s vice president downstream, Andrew Smith said the launch of B20 transport fuel in NSW is a response to customer demand to reduce the environmental impact of fossil fuels and potential liability under the Federal Government’s carbon pricing scheme.

Smith said that market research showed more than 50 per cent of commercial customers would consider using B20 in their fleets for either taxation or environmental reasons.

“Shell is committed to understanding customer needs, and when we asked them if they would consider using B20 if it was available 28 per cent they said they would because of the tax benefit,” he said.

Under current carbon pricing, biodiesel attracts a zero impost by the government.

“Given the zero rating of biodisesel under the carbon pricing scheme, using a B20 fuel in their trucks can help affected customers significantly improve their bottom line.

“A further 36 per cent said they would consider B20 because of the positive environmental aspects of using the fuel.” Smith said.

Shell’s B20 is a combination of diesel and a bio component produced from vegetable oils or animal fats that meet Shell’s sustainability standards.

Logistics Magazine announced the launch of Shell’s Diesel Extra fuel in 2011, at the time senior fuels and lubricants technical advisor Mick Pattinson, said the new fuel would help the road transport sector improve fuel efficiency and reduce their maintenance costs. According to the company, the Shell Diesel Extra can deliver fuel savings of up to 3 per cent over the lifetime of a vehicle compared to regular diesel.

Discussing biodiesel’s future in the mining sector, Australian Mining reported that bio-fuels can save company’s money and reduce emissions, but like any new technology, some adjustments need to be made when it comes to implementing the technology on mine sites. There are a number of both advantages and complications of using higher blended fuels.

At the time Ellis told Australian Mining that a "financial incentive around the carbon pricing scheme and environmental incentives" were "two key reasons we’d expect mining companies would be interested in this fuel."

Darren Barwick, Shell’s technical mining team leader, points out that choosing the right feedstock for biofuel is the key to ensuring it works for your business but admits there is "no perfect feedstock that fits every application".

Barwick said that although biodiesel can be used now on current infrastructure, things like poor quality feedstocks can create operational issues.

Because biodiesel is made from biological products it reacts differently to mineral diesel when put under different pressures and these are the most important things to keep in mind when making the decision to incorporate the product into operation systems.

However given its higher flashpoint, biodiesel is also less likely to ignite than conventional diesel providing an additional level of safety for underground mining application, as opposed to LNG or other such products where you have to invest in new infrastructure and technology.

He added biofuels held a distinct advantage for companies because they can use them ‘straight away’.

Barwick says interest from mining companies who want to incorporate the fuel is strong.

“There is definitely interest in using bio fuels,” he told Australian Mining.

“They know it’s there but don’t know much about it or who may be a bit worried about using it because in the past there has been some poor quality bio fuels in the market place which has caused issues.”

Biofuels Association of Australia said adopting second generation technologies when they become viable will be a key way to sustain the mining, transport and infrastructure industries but says alternative feedstocks are needed, as well as additional infrastructure and more consistent access to markets.

B20 is already available from Shell’s Melbourne terminal and Shell said they plan to expand availability across the country.

Fuel prices: worse to come

The Victorian Transport Association (VTA) has spoken out about the rising fuel prices and the impact this is having on transport companies.

VTA CEO, Philip Lovel said: “The transport industry is carrying the burden of these fuel prices and we need to ensure that transport operators are sharing this burden with their customers, or they will not survive.”

World oil reached a new record price above 120 US dollars a barrel on Tuesday as concerns over the United States economy continue. Oil prices on both sides of the Atlantic have nearly doubled in a year and have continued to soar since the benchmark New York contract broke through the 100 US dollar mark at the start of the year.

Philip Lovel said that the only positive is that the Australian Dollar is at record levels, and if it ever drops below 90 cents to US dollar we are all in trouble!

Supply jitters in Nigeria and geopolitical tension over Iran have added to the price surge. Nigeria has lost about half its oil output amid a strike and rebel attacks. A group of Nigerian militants attacked an oil ship off the coast of West Africa.

Problems continue in Iran, which said on Monday it would reject any offer that violates its right to the full nuclear fuel cycle after world powers said they had prepared a new package to end a long-running standoff over its nuclear programme. Oil players fear the ongoing tension could result in Iran using oil as a bargaining chip. Iran is the second-largest producer in the Organisation of the Petroleum Exporting Countries (OPEC) cartel.

Mr. Lovel said: “The daunting thing about the recent price rise is that there was no shortage of oil, no sudden embargo, no exporter turning off its spigot. Some attacks on pipelines in Nigeria was all it took. We are in a period of world uncertainty but as an industry we must survive. If the transport operators are not receiving a fuel levy from their customers then they are in trouble. Every company should have a fuel levy in place. The fuel levy is negotiated with customers, and there are also specific levies for sub-contractors.”

The VTA has information on price increases and can assist companies in setting up a monthly fuel levy which is a rise and fall paid one month in arrears. With this system no one loses. For example since May 2003:

• A 3 tonne truck fuel cost percentage has moved from 13% to 19% in the VTA cost model;

• An 8 tonne truck has moved from 13.45% to 19.22%; and

• A 12 tonne truck has increased from 10.95% to 18.01%.

This equates to thousands of dollars that a transport company cannot afford to cover to stay in business. If companies are not adjusting to this change then they are losing margins which they will find impossible to recover. The VTA appeals to all customers to work with their transport providers to agree on how they can adjust to this unprecedented change in fuel costs.

Mr. Lovel concluded: “We can’t have companies living in a false hope that the prices will go down to levels of five years ago. The price of crude is expected to hit US 200 dollars a barrel in the next two years. Trucks play an important role in our economy, and are the primary means of moving our freight and day to day goods. We need to ensure they can still operate effectively.”

What has happened with fuel prices?

Year 1 May – Diesel Cents Per Litre (CPL)

2001 96.81

2002 88.33

2003 92.90

2004 97.60

2005 116.61

2006 145.81

2007 124.22

2008 165.63

For further information on the VTA Fuel Levy please contact the VTA. We are able to work with transport companies and customers to develop individual fuel levies for your business.

VTA member survey

The VTA conducted an industrial relations survey in November 2007 and asked if members charge a fuel levy to customers. Of the 48 total responses, 13 stated they do not (27% of respondents). This figure indicates that many businesses are still not charging a Fuel Levy, despite the rising fuel costs and the impact on their business.


Charges up, $70 m for safety

New ‘black box’ technology that makes it more difficult for truckies to drive for too long or at high speeds are amongst the measures contained in the federal government’s $70 million plan to tackle the ongoing loss of life on Australian roads.

Upon becoming Infrastructure and Transport Minister, Anthony Albanese says he was shocked to learn that the National Road Safety Strategy target of a 40 per cent reduction in road deaths by 2010 was unlikely to be achieved.

"This is simply not good enough and should be a call to action for all governments, industry as well as the broader community."

Minister Albanese announced a program that "demonstrates my determination to work with the states and territories as well as industry to substantially cut the number of speed and fatigue related road fatalities."

Significantly, about one in five road deaths involve heavy vehicles, with speed a factor in around 30 per cent of these crashes and driver fatigue in up to 60 per cent.

Action to improve speed and fatigue enforcement is the key to achieving a substantial reduction in road deaths, he said.

Accordingly, the Rudd Labor Government’s $70 million, four year Heavy Vehicle Safety and Productivity Plan will fund:

– Trials of technologies that electronically monitor a truck driver’s work hours and vehicle speed – one using an onboard ‘black box’ or electronic log, and one which makes use of the Global Positioning System (GPS);

– The construction of more heavy vehicle rest stops and parking areas along our highways and on the outskirts of our major cities; and

– Upgrades to freight routes so they can carry bigger loads.

"It is our intention to directly involve the trucking industry in the process of putting the available funds to the best possible use", the minister said.

"At the same time we will work with the states and territories to investigate the introduction of mandatory, periodic health checks for heavy vehicle drivers as well as undertake further work on new national standards for random drug and alcohol testing.

"At present, the small minority of truck drivers who don’t follow the rules threaten the safety of all road users – including themselves – and leave responsible truck drivers at a competitive disadvantage.

"As well as improving road safety, our Plan will help lift national productivity by funding upgrades to the road network such as the strengthening of bridges.

"This targeted investment in the road network will open more roads to heavy vehicles, freeing up the movement of freight across the country and easing congestion," the minister said.

The sting in the tale is an increase in registration charges for 69 per cent of heavy vehicles, and a rise in the diesel excise.

"This much greater investment in road safety and transport productivity has been made possible by today’s agreement amongst the nation’s transport ministers to overhaul and introduce fairer heavy vehicle charges," he said.

Under the new regime recommended by the National Transport Commission (NTC), registration fees for 25 percent of the nation’s 365,000 heavy vehicles will be cut while the fees on 69 per cent of the fleet will rise by between one and ten percent.

While larger increases are proposed for the six percent of heavy vehicles that are said to currently not pay their fair share, they will be phased-in over three years to minimise the impact on the industry.

The component of the heavy vehicle charge collected by the Commonwealth from fuel used by trucks and buses – the Road User Charge – will be increased by 1.367 cents per litre and indexed to cover future road costs.

After discussions with the industry, as well as state and territory transport ministers, it has been decided that the increase to the Road User Charge will take effect from 1 January 2009 – not 1 July 2008 as recommended by the NTC.

"It is important that heavy vehicles pay their fair share of road construction costs as well as for the damage they do to the road network – a principle embraced by successive governments as well as the transport industry," minister Albanese said.

"At present this is not happening.In December 2006, the Productivity Commission Inquiry into Road and Rail Infrastructure concluded the existing charges are insufficient and that the heaviest vehicles are not paying for the damage they cause while lighter trucks are paying too much.

"The increase in the Road User Charge will ensure all heavy vehicles types pay their fair share and will have only a marginal impact on a vehicle’s operating costs.

"I also note that the Charge has not been increased for seven years.

"We have carefully considered the proposed changes taking into account industry and stakeholder feedback received during the consultation period that followed the release of the draft Regulation Impact Statement (RIS) last July.

"While a 2010 national target of 5.6 deaths per 100,000 was agreed to by the previous government, the eventual figure is likely to be much higher with the current rate sitting at 7.7. The annual economic cost of road accidents – in terms of loss of life, injury and damage to public and private infrastructure – is estimated at $18 billion and rising," the minister said.


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