00:00:00 - 00:00:51
Lance Mortlock
Welcome to our next episode of the Energy Drivers podcast. I'm Lance Mortlock and I'm your host of today's discussion with Scott Sharabura, who's the Vice President of Electric Vehicle Charging at Parkland Corporation. Throughout our series, we invite renowned Canadian energy and mining leaders to discuss key issues, provide insights and ask challenging questions. In today's market, fuel distributors are at the interesting and, I would say, critical intersection of the energy transition. Electrification and consumer preferences are shifting entire business strategies. In this episode we're going to explore how those downstream activities are adapting to the ever-changing landscape here in Canada. Scott, thank you for joining our podcast.
00:00:51 - 00:00:55
Scott Sharabura
Lance, thank you very much. It's a pleasure to be here.
00:00:55 - 00:01:07
Lance Mortlock
So, Scott, let's get started with maybe an introduction. Help our listeners understand a little bit about you, brief overview of Parkland and your role in the organization.
00:01:07 - 00:02:56
Scott Sharabura
Sure thing. So, I'll start off with Parkland. So, Parkland is a large fuel marketer and convenience store operator. We're based in Canada, but we do have operations all across Canada, into the US and across the Caribbean, stretching down to South America. We serve a number of different markets, including retail and commercial customers. But the biggest thing that we're probably known for would be the retail fuel segment. So, we do own, operate and supply a large network of gas stations, that stretches right across Canada and into the other geographies that I mentioned. In Canada alone, between us and our independent dealers, we have about 2,200 retail sites, in every province and stretching up to the territories. You wouldn't recognize, none of our stations actually carry the Parkland brand. So, you've never actually been to a Parkland branded station. But depending on where you are in the country, you'd recognize Ultramar in Québec, Ontario, and Atlantic Canada, you'd recognize Pioneer, you'd recognize Chevron, you'd recognize Fas Gas and quite a few of the Esso sites in Canada would be ours as well. So that's a little bit about Parkland. I am the Vice President of Electric Vehicle Charging for Parkland. So, we're noticing that a lot of our customers are making the transition from fuel vehicles to electric vehicles. And we want to be there with our customers through the transition. So, we started up a team of full-time, dedicated professionals who are focused on building an EV charging business, that is located, right now we have 55 sites that are open mostly in BC, but a few in Alberta and Ontario. But we've got plans to be able to expand that, quite a bit more in Ontario and Québec in particular, because we're seeing a significant amount of EV adoption in those areas.
00:02:56 - 00:03:11
Lance Mortlock
And, you know, given that interesting background that you've got, Scott, and I know you've previously played roles in consulting and strategy. What made you pivot towards an EV charging program at Parkland? What was the draw?
00:03:11 - 00:05:24
Scott Sharabura
Yeah, it's not exactly the cleanest fit. Actually, if you go back far enough in my background, I started my career as a chemical engineer working in an oil refinery. So, I was very much old oil and gas through and through. Worked for Imperial Oil, at the refinery that they have in Sarnia, Ontario. That's where I started my career. And as you mentioned, I worked in consulting and strategy, largely serving oil and gas clients for a very, very long time. I joined Parkland about six years ago and was heading up Parkland strategy team. And part of what I was taking a look at, and my team was taking a look at was the energy transition, and what was happening around energy transition, trying to separate fact from fiction, trying to predict the future, and the ways in which it was going to be affecting our business. One of the things that we landed on as part of that assessment was an emerging opportunity for us in EV charging. So, we were noticing, this was one of the things that kind of turned on a light switch for me is that we were noticing, but not everywhere, but in some markets, EV adoption was really starting to take off. And for me, I think the light bulb went off when I first saw, I think it was back in 2019, when EV adoption in British Columbia surpassed 10% of new cars sold. And when it hit 10% of new cars sold I thought to myself, this is kind of interesting. Obviously not happening everywhere, but there are some markets where something is happening. And I think others at Parkland also saw that. And so we started to take a deeper look at it, started to take a much more serious look at it. And that's what led to looking at pilot programs. We did end up launching a pilot program, one site in Kelowna, British Columbia. That led to a more expanded network that we've had in BC. And just as we've been getting into it, the data are showing pretty clearly that a lot of consumers are opting for EVs in some of the markets in which we operate. And so that's for me. I wouldn't have predicted five years ago that I would have been leading an EV charging team. That would have been the furthest thing from my mind. But the market is changing and we're trying to change with it.
00:05:24 - 00:05:46
Lance Mortlock
Parkland business is, you could argue, facing a bit of a threat. You know, many stakeholders, me including, are wondering what is the future of petroleum pumps in the age of decarbonization and fleet electrification that you've described? What are your thoughts on that? Will electric pumps displace traditional stations in the near future?
00:05:46 - 00:07:35
Scott Sharabura
Certainly not in the near future. I think what we're seeing is that, as we take a look at the energy transition, we're seeing more opportunity than threat, quite frankly. We're seeing a lot of opportunity that's opening up for us in new markets. And I think we've been doing what we can to be there with markets as they've been evolving, as customers have been expressing newer and newer preferences. So, for us, we do see a lot of opportunity in here. Now, I would say it is changing. So, I wouldn't say, I wouldn't describe it as a threat, but I would describe it as a very, very significant change that is facing our industry, a very significant change that is facing Parkland. I’d say the good thing is, like Parkland is actually really good at dealing with change. Just as a company, we're quite a resilient organization. We're quite adaptable. Quite creative, commercially creative when it comes to looking at new opportunities like this. So, we're not looking at this as a threat. We're looking at this as an opportunity to do something different, to tackle an evolving market in different ways. So right now, for us, that has meant, adding EV charging options to our sites. So, we've, this is not a replacement situation. Right now. This is an “and” not an “or.” So, a lot of our sites are actually very, very well suited to accommodate customers. But to accommodate customers that are looking to charge their vehicles, a lot of the things that they're looking for are kind of similar to what fuel drivers are looking for. So, they want a very convenient location. They want a safe location. They want a place to go to the bathroom. They want a place to grab a snack. All of those. And we offer those to our fuel customers today and they're great amenities to be able to offer to EV drivers.
00:07:35 - 00:07:58
Lance Mortlock
Scott, with change, there's ups and downs. And it's interesting, when you look at the slowdown in EV sales across North America, you know, I think Tesla's announced layoffs due to difficult market conditions. Should we be concerned, Scott, about EV adoption, or is this more kind of a temporary issue? What's your thoughts on that?
00:07:58 - 00:09:17
Scott Sharabura
So, I wish I had a crystal ball to be able to say that. The only thing that I would say is that when we tend to look at these trends, it's going to be a bumpy ride. And so, you'll find some quarters go up a lot, some quarters dip down. We've actually seen instances in the not so recent past where we've had downticks in EV demand. But if you zoom out and you take a look at the trend that's happening, it is very clearly up and to the right. And so, when we see things like the sales numbers that come out that might be a little bit less rosy than what one might have anticipated previously. In a lot of ways, we wait for the next sales forecast or the next sales results, and the next sales results, and the next sales results. Because ultimately, we can see where this is trending. Even through the ups and downs, from what you might see, I think again, from my perspective, I'd say it's a little a little bit more temporary than something that we're anticipating to be a sharp veering. We knew this was going to be a bumpy ride. It's all, it's easy to say, okay, we know where things are today, and we know where things are going to be 30 or 40 years in the future. There's going to be a lot of twists and turns. And what I describe, what's happened in the last six months. So, there's been a few twists and turns, but we knew those were going to happen.
00:09:17 - 00:09:44
Lance Mortlock
Yeah, more of a bump in the road. And when you're making investment decisions at Parkland, do you invest more heavily in renovating and improving the traditional gasoline pumping stations or the EVs, or is it a bit of both? If the future is electric, do you just let your legacy assets kind of wind down? What does that that investment look like?
00:09:44 - 00:11:52
Scott Sharabura
No, no, we're very much still building both, investing in both. We're trying to be led by the customer and taking our cues from what customers are asking for. There is a lot market to market. And so, we're seeing in some markets there's a significant need to be investing in EV charging. In other markets, it's a little early for that. And a lot of ways, actually, where we are tilting at least some of our investments is looking at investments that actually work in both cases. So, we believe that strong locations and strong retail amenities, food options, convenient store options, we believe those will stand the test of time. Now, today they're serving largely fuel drivers. In the future, they're going to be serving largely EV drivers. And what that pathway looks like between now and then, we actually we don't know exactly what that pathway is going to look like. But to the greatest extent possible, we're looking for the fundamentals that make for a good retail site that we know travelers are going to want to stop at, travelers driving different types of vehicles. We'll see what that looks like over time. We just opened this site, I had an opportunity to go to one of our sites in a town called Papineauville, Québec, which is on the highway between Montréal and Ottawa. New location, fantastic location right off the highway, and it's actually the first site that we've built where EV charging is being designed and right from the ground up rather than retrofitting EV charging right onto an existing site. We were actually able to design the site so it's got enough space for fuel, it's got enough space for EV charging, it's got expansion space for the future as EV charging grows, it's got a great set of restaurants that are there. So, a Tim Hortons and a Wendy's restaurant that are there. Really nice convenience store. And we believe that that site is going to be serving both fuel drivers and EV drivers for quite some time. So, to the greatest extent possible, we can't always do this. But to the greatest extent possible, we're trying to kill multiple birds with one stone and make those investments that are going to be. So, we think are going to stand the test of time with drivers no matter what they drive.
00:11:52 - 00:12:36
Lance Mortlock
And I know that Québec and BC, in particular, two of the provinces in our country that we've seen the highest adoption rates. One of the reports that I would encourage our listeners to engage with is our Consumer Index Report that looks at global e-mobility trends and specifically breaks down some of the Canadian data. And it's interesting to see the level of adoption, which varies quite considerably across the country. Maybe one question I have for you, Scott, is is there money in charging for you guys? Are you making money out of these EV charging stations across the country or not yet?
00:12:36 - 00:12:54
Scott Sharabura
So it's still a little bit early. I couldn't even say yes or no necessarily because it's still very much a nascent business. And there's so much that we're learning in terms of what the economics look like. But we do believe that it's important for us to be in the business in order to work it through. We definitely see a pathway to profitability.
00:12:54 - 00:13:24
Lance Mortlock
Last year, and this is interesting, I saw a headline that Parkland partnered with the Canada Infrastructure Bank to install up to 2,000 fast-charging ports across the country. I also observed other competitors doing the same, Scott, to pursue similar commitments. Do you think that there's a bit of a race among a few retailers to be a leader in terms of EV charging deployment? Are you feeling the heat?
00:13:24 - 00:15:27
Scott Sharabura
Well, I'd say not even just amongst fuel retailers. So, I think there's, one of the interesting things about the sector is it actually is touching on a lot of different market participants. So yes, fuel retailers are making investments and we're proud to be among them. But we're also seeing automakers make investments, Tesla chief among them, they've got a fantastic network that stretches right across the country. We're seeing utilities invest quite a bit. So, companies like Hydro-Québec and BC Hydro, have been at the forefront of investing in EV charging. And then we're seeing a lot of startups as well, a lot of pure play EV charging companies, that are investing as well. So it is, I think there's a lot of investment that's coming and there's a lot of interesting innovation that is happening there. I think from a fuel perspective, anybody who is operating an existing fuel retail location is asking the question, “Look, is there an opportunity for EV charging in here? It's a natural opportunity if we think that EV adoption is going to rise, and we're going to start to see fuel demand ease off a little bit.” It's a natural opportunity to be taking a look at it. So most of the fuel retailers that we see are investing, some are investing aggressively, some are investing a little bit less aggressively, and they're taking a bit of a wait-and-see approach. I think for us, you mentioned the deal that we were able to secure with the Canada Infrastructure Bank. So that is a good example. Canada Infrastructure Bank is a program that is designed in particular for large-scale rollouts of charging infrastructure. So not just a site here, a site there, but it is intended to be a multi-year program, intended to be putting in place 2,000 charging ports, which is a really, really significant addition to what currently is out there in terms of charging infrastructure. So we are quite happy to be able to partner with the Canada Infrastructure Bank to make that happen. And we're working right now to make sure that those sites are going to be coming to fruition.
00:15:27 - 00:15:50
Lance Mortlock
Very exciting. Congratulations on that. As the EV landscape continues to evolve, Scott, one of the things that I keep thinking about is education and advocacy becoming increasingly important in terms of driving consumer adoption. Are Parkland engaging stakeholders to sort of promote EV awareness in any way?
00:15:50 - 00:17:33
Scott Sharabura
You know, it's kind of funny in a lot of ways EV education and awareness starts at home. And so for my team that manages our EV charging business, we spend a lot of time working with the rest of our colleagues, some of whom have driven EVs, but many of whom have not, and just making sure that everybody within Parkland has a good understanding of this transition that's coming and what's the same and what's different, and how do I interpret everything that I'm that I'm seeing in the press? We've actually spent quite a bit of effort, even just internally, to make sure that we have, that we're prepared for the consumer shift that is currently underway. I think beyond that, we've definitely done a fair bit on education. So we do engage in a number of different conferences and events to be able to reach consumers, mainly for us, today it's more around making sure that people understand that charging infrastructure is out there, that we're out there, that we're serious about building, that we are an option, so that if they are looking to transition to electric, we want to be able to accommodate them and we want to retain them as a customer. And so that's been a big focus for us, is trying to engage at that level, making sure that people understand that, yes, there are options that are out there if you're looking to make the switch. We do also engage quite a bit with a number of different community organizations across the country, local EV associations, national EV associations as well, to make sure that we're linking together with others in the industry to understand, to make sure that Canadians understand where things are headed. And that we’re there as a partner to be able to help make the transition easier.
00:17:33 - 00:17:49
Lance Mortlock
Maybe lastly, Scott, before we wrap up here, what excites you most about the evolving role of fuel distributors in the Canadian energy transition? Any specific opportunities that are personally passionate for you?
00:17:49 - 00:18:45
Scott Sharabura
I'd say the biggest thing for me is the fact that we don't know. Nobody really knows how this is going to play out. I mean, this is a very significant transition that is going to be happening. Now, it's going to take a long time to happen. This is not something that happens, in a couple of years or even five years, this is going to be decades in the making. But it's utterly fascinating to think through how that's going to change. Where are people going to charge their cars? A lot of people can charge at home now. People can charge at grocery stores and banks and like a lot of places where they couldn't have previously charged. Understanding how that is going to play out, it's a huge problem, a huge challenge, and a huge unknown for the industry. And so, I think for me personally, I get a lot of excitement just knowing that we're part of figuring that out. It's a grand unknown and helping to write the story, and helping to be part of it, actually, to me is a very, very exciting thing to be able to do.
00:18:45 - 00:19:00
Lance Mortlock
You're at the centre of the storm within your company because it certainly is a threat as you outlined. But it also could be a very exciting opportunity to kind of transform the company.
00:19:00 - 00:19:55
Scott Sharabura
Yeah, certainly. It is a great opportunity for us. It's a really unique opportunity to be in a place where we don't know where things are headed. It's a fast-growing market that's really, really exciting. It's also an unknown market. Our perspective has been, the best way to do it is to actually be a participant in the market. That's the clearest way that we're going to be learning. We're going to make mistakes, we know that. We're going to do some fantastic things. We know that as well. It's hard to kind of write down the plan of exactly what that's going to look like. But I think for myself and for the rest of our team that is focused on EV charging, that's part of the fun. Part of the excitement is knowing that there's a lot of things that we're going to be learning, we're going to be trying things. We're going to be failing. We're going to be succeeding. It's going to be a great ride, it's going to be a roller coaster. But I think we're all strapped in and ready to go.
00:19:55 - 00:20:03
Lance Mortlock
Any final thoughts or anything we should have covered that you wanted to get off your chest, Scott, before we wrap up here?
00:20:03 - 00:21:17
Scott Sharabura
I think the main thing that I would come back to is just thinking about the long term, and how to see past all the ups and downs. We touched on this a little bit earlier. It does take a little bit of fortitude to be able to say, a couple of years ago, there was a huge push for electric vehicles. Everybody thought the transition was going to be happening immediately. Now we're seeing a little bit of hesitation, some pullbacks in investments. And so, people are getting more pessimistic right now. It's tough to not get overexcited. And it's tough to not get over fearful. But it is very, very important to step back and take a look at the long term and say, look, this this is the direction that automakers are heading. This is the direction that utilities are heading. This is the direction that policymakers are heading. And this needs to be a direction that fuel retailers are heading as well. So, it is very, very, it's hard at times to ignore the headlines. It's hard at times to ignore some of the speed bumps that happen along the way. But it's very, very important to keep in mind that this is something that it's going to take years to roll out, but we can all see the direction that it's heading.
00:21:17 - 00:21:25
Lance Mortlock
Awesome. Well, that's a good place, I think, to wrap up, Scott. Thank you for joining us.
00:21:25 - 00:21:27
Scott Sharabura
My pleasure. Thank you very much, Lance.
00:21:27 - 00:22:48
Lance Mortlock
So, for our listeners, if you have your own questions or queries, you can reach out to EY via the attached contact details. Finishing another great conversation and episode. I'd like to share a few final thoughts. One, energy transition is changing priorities for fuel distributors. Downstream companies like Parkland are proactively responding to market shifts and consumer needs. In the future, we will likely have a mix of traditional petrol stations and EV charging. Number two, EVs are here to stay, although some consumers still have concerns and are hesitating about EVs, the market continues to grow. And I think, as Scott pointed out, you know, you're going to have blips along the way, but the general trend is up. And finally, Parkland is focusing on diversification. The company is strategically investing in operations beyond traditional assets and into sustainable energy solutions like EV charging and batteries. We can all look forward to more EV charging accessibility around our neighbourhoods and across the country. Once again, thank you for joining our podcast. We'll see you on the next episode. Goodbye, everyone.
