Frequently Asked Questions


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Questions about Your Equity Statement.

Ethanol

BioDiesel

ULTRA LOW SULPHUR DIESEL FUEL



Frequently Asked Questions About Your Statement


What is Equity? How Does it Work?
By holding equity in Red River Co-op, you are a part owner. Each time you purchase petroleum products and give your membership number your purchases are recorded. At the end of the fiscal year, a portion of your purchases may be returned in the form of an equity allocation (share dividends). The more you purchase, the more you receive in equity. In addition, the Board may buy back a portion of your total equity (share redemption). This amount becomes the cash payment to you, a member-owner.

You Paid 50% of my equity back, what happens to the rest?
The remainder of the equity remains in your share account with Red River Co-op. When allocations are made in future years, the allocation amount will be added to your remaining equity, increasing your equity balance. Then as repayments are made, the repayment is calculated on your total equity balance after the current year's allocation.

When can I get all of my Equity paid out?
Provisions for full payments of equity are made for:

  • estates;
  • members over 65 years of age;
  • and members who move out of the trading area.

A written application for repayment must be provided to Red River Co-op in each of these instances (Fill out application). All requests are subject to Board approval.

Why is there GST on my statement?
Revenue Canada allows the GST to be returned to you based on your allocation. Red River Co-op returns that GST to you by adding it to your equity account, ultimately getting paid back to you in the form of cash repayments.

Why is Tax taken off?
Red River Co-op is required to submit a minimal amount of tax to Revenue Canada. Fifteen percent of any allocation over $100 is submitted on your behalf. When filing your income tax, you are entitled to include the deduction as a tax credit (box 22 on the T4-A statement). If the petroleum was used for personal use only, the allocation (box 30 on the T4-A) does not need to be included as part of your income. If you are claiming some or all of the purchases as business expenses, then you must include an applicable portion of that allocation as income on your income tax form.

Why didn't I get a cheque?
The cash repayment is based on your total membership equity. This year, the cash repayment was 50% of your total equity. A cheque would have been issued to you if the cheque amount was $10 of more. That means if you had equity of $20 or more after the allocation, you would have received a cheque with your equity statement. For those members with less than $20 of equity, a cheque was not issued.


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Ethanol Discussion Paper


1.ENVIRONMENTAL BENEFITS

-Significant reduction in Carbon Monoxide emissions.

-Some increase in Carbon Dioxide emissions.

-Studies indicate that when the total emission benefit of ETHANOL is determined, there is at best a marginal net emission benefit (i.e. when emissions from equipment producing and transporting the ethanol is taken into account).

2.ETHANOL OPERATIONAL ISSUES

-There are no issues with ethanol blended gasoline stored in new, clean and dry containers or tanks.

-If there is sufficient water in storage (as little as 1%), it may emulsify with the ethanol causing operational problems and plugging filters.� The ethanol can actually come out of the blended gasoline when water is present.

-Ethanol will act as a solvent, dislodging rust and scale from corroded tanks.

3. LEGISLATION

-Passed in 2003 that there would ethanol blended gasoline sold in Manitoba by 2005. The legislation provided for possible incentives for producers.

4.ETHANOL PRODUCTION

-No new Manitoba production has occurred, meaning that ethanol blending required by the legislation has not gone forward.

-Current production remains the small HUSKY plant at Minnedosa.

-HUSKY has now announced the construction of another plant at Minnedosa, expected to be large enough to provide sufficient supply to meet the Manitoba legislation.

5.CO-OP SYSTEM POSITION

-The CO-OP Refinery in Regina has installed and commissioned equipment and storage for ethanol. The first retail shipments of ethanol blended gasoline in Saskatchewan has been made in April 2006.

-Plans are in place for purchasing Manitoba produced ethanol for blending at the CO-OP refinery for supplying ethanol blended gasoline to Manitoba.

6.POTENTIAL STORAGE PROBLEMS

-Vehicle tanks

Again few problems are expected, although some consumers will have problems.

-Farm storage tanks

More problems are expected due to older tanks with condensation build up over the years and no regular tank cleaning. Retails will help customers by supplying filters or possibly offering tank cleaning programs.


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BioDiesel Disscussion Paper


BIODIESEL

1.5% TO 100%

-Currently not economical. 

-The price of diesel would be significantly higher than regular diesel fuel. Consumer demand for a higher priced product would be very low.

-The cost of biodiesel production does not allow a biodiesel diesel fuel to be sold competitively with normal diesel fuels.

-While still not close to competitive with traditional diesel fuel, the differential may be the closest it has been. This is due to the current low price of canola and high price of crude.

-Should the price of canola rebound as would be hoped for canola farmers, or the price of crude drop to more traditional levels, the economic feasibility of biodiesel would worsened further.

2. AS A LUBRICITY ADDITIVE (1%)

-Federated Co-operative Ltd. has twice done a feasibility on using biodiesel as a lubricity additive.

-The second feasibility included testing to confirm the biodiesel treat levels with CO-OP diesel fuels required to provide adequate diesel fuel lubricity.

-Both feasibilities suggested that the biodiesel treat cost was 5 to 10 times the treat cost of chemical lubricity additives currently available.


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ULTRA LOW SULPHUR DIESEL FUEL


ULTRA LOW SULPHUR DIESEL FUEL

1.WHY REDUCE SULPHUR LEVELS FURTHER

-The new emission reduction equipment on diesel engines cannot tolerate sulphur, therefore the diesel fuel sulphur level is required to be reduced to less than 15 ppm June 1, 2006.

2.CO-OP PREPERATION

-The CO-OP Refinery has had the capability of producing ultra low sulphur diesel fuel for some time.

-The CO-OP Refinery will be in position to produce ultra low sulphur diesel fuels as required by June 1, 2006 to meet the legislation.

3.LUBRICITY

-Since test procedures have been developed to measure lubricity, CO-OP diesel fuels have been assured to have adequate lubricity. 

-Prior to that, it is believed CO-OP diesel fuels had adequate lubricity, it was just there was no testing available to prove it.

-New high performing chemical lubricity additives have been developed by the additive industry. These have been tested by the CO-OP Refinery with CO-OP ultra low sulphur diesel fuels confirming CO-OP ultra low sulphur diesel fuels will be assured to have adequate lubricity.


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