This piece investigates the phenomenon of closing and abandoned gas stations over the past decade, and asks whether this is part of a larger trend.
By John Calimente, re:place magazine
If you want to buy gas in Vancouver’s downtown core, there are now only two gas stations to choose from. And across the city the story is the same: fewer stations every year. Why have so many gas stations in Vancouver been closing? And is this part of a larger societal trend?
As someone who doesn’t own a vehicle, I normally don’t give much thought to the city’s gas stations. But a couple of recent events got me thinking about their shrinking numbers. The first was the closure of the Shell station at the corner of Denman and Pendrell. Now here is a prime location if I ever saw one – smack dab in the middle of the West End, home to over 40,000 people, bigger than most B.C. towns. And checking VanMap, the City of Vancouver’s handy online data map, I found that there were at least 26,000 cars passing right in front of this station every day. So it was a surprise to walk by in September and see the station all boarded up.
Then a couple of weeks later I was walking in the West End when a car pulled up beside me to ask directions to the nearest gas station. This was the first time this has ever happened to me in Vancouver. It seemed more like something that would occur on a rural road out in the wilds of the Fraser Valley. But after thinking a bit I realized that the only two gas stations left in the downtown core were the Chevron station at the corner of W. Georgia and Bidwell, and the Esso station at the corner of Davie and Burrard.
A quick Google Maps search came up with 72 gas stations in Vancouver, of which 45 are on the East Side, 25 on the West Side, and 2 downtown. But how many have closed down in recent decades? 
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This site referencing a UBC student’s survey of gas stations found that there were a staggering 248 gas stations abandoned between 1970 and 1998. That’s a minimum 78% drop (not counting stations abandoned in the last 11 years) in the number of gas stations in Vancouver. For Canada as a whole, the National Retail Petroleum Site Census found that the number of stations has dropped from 20,000 in 1989 to about 12,700 at the end of last year, an average decline of 2% per year. And B.C. has the second lowest number of stations per capita, after Ontario. Why do they continue to close?
After conducting an a search on the North American market, it seems there are five factors at play:
- A highly competitive market – This article from a Pennsylvania site and others note that just selling gasoline is no longer profitable. When there were more retail gas stations, each selling much less gasoline per station than today, they had to charge more per litre to cover their costs. The markup on gasoline at a typical urban station currently averages only about $0.05 per litre. Stations “..live and die by their inside sales”, meaning convenience store sales as well as car washes. Chevron Canada’s website spells it out clearly: While the potential average income for gasoline stand owners is estimated at $45,000 per year, it jumps to $80,000 per year with the addition of a convenience store, and more than $100,000 per year with a fast food shop like White Spot Triple O’s.
- Due to rising distribution costs after the 1973 oil embargo, oil companies shifted their sales strategy from multiple smaller stations to fewer stations selling more gasoline per station, enabled by self-service and pay at the pump technology. According to the book ‘The Gas Station in America‘, while the minimum sales for stations in the early 1980s was about 200,000 litres per month, by 1990 this had jumped to 570,000 litres per month.
- Tighter environmental regulations which mandate replacing aging tanks and environmental remediation after 20 years of service.
- An overall decrease in gasoline consumption, according to the Sightline Institute, due to increasing transit ridership (woohoo!), higher fuel efficiency, decreased travel per vehicle, as well as people choosing more pedestrian-friendly neighbourhoods. In B.C., the weekly consumption per person has fallen from about 30 litres per capita in 1980 to a 20 litres per capita in 2006, a drop of 27%. And as shown in the graph below, B.C. drivers use about 10 fewer litres per week than drivers in the Pacific Northwest states. And while B.C. added about 1.5 million people between 1980 and 2007, total yearly highway gasoline consumption has only increased by 5% in that time.
- Increasing land prices: the lot occupied by the recently closed Shell station on Denman St. is valued at over $3.7 million, according to VanMap. The highest and best use for sites like this is more likely to be retail, residential, or a combination of the two.
I have to say that as a pedestrian and transit user I am very pleased with this trend in urban areas. Gas stations are dead zones for pedestrians and are difficult to walk past due to the frequent comings and goings of vehicles. The stations usually occupy prime corner lots on busy streets that with a different type of use could become community gathering places rather than simply fuelling stations. And the environmental and social costs cannot be ignored; Few city dwellers would live next to a gas station if given the choice.
I’m curious to see how the reduced number of stations will affect competition in the long term, and in turn, gasoline prices in the city. Will fewer stations mean higher gasoline prices? Or will competition be just as fierce amongst the remaining stations? Luckily I’ll be on the sidelines in either case.
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John Calimente is the president of Rail Integrated Developments
