Money isn’t everything, even when it comes to building an oil refinery. David Black says he has financing committed to build his $25-billion Kitimat Clean Ltd. refinery, which would process 550,000 barrels of oil a day. It’s quite an achievement to have brought the project this far in a matter of months, but it still has a long way to go, even though Premier Christy Clark has just announced her support for the project.
It’s a brave thing Black has done, proposing a new petroleum project in the face of the considerable opposition to Enbridge’s planned Northern Gateway pipeline. But that opposition was, at least in part, his motivation.
His proposal addresses one of the big concerns about Northern Gateway — a stream of tankers carrying bitumen through B.C.’s coastal waters, and the potential for environmentally catastrophic accidents. Refining the bitumen at Kitimat would result in tankers carrying lighter petroleum products — gasoline and diesel fuel — which would evaporate if spilled or be more easily cleaned up than bitumen, says Black.
Since he announced the proposal last fall, the anticipated cost of the refinery has increased by $3 billion because of a technological change that would cut in half the greenhouse-gas emissions from the refinery. “We’re going to have the cleanest and greenest oil refinery in the world,” he says.
Black cited a poll showing that 52 per cent of British Columbians support his plan, while 57 per cent oppose the Enbridge plan. Approval of his plan would go up to 66 per cent if an environmentally sound way can be found to transport bitumen from Alberta to the coast.
That’s a huge challenge, but Black says the project will proceed even if the pipeline doesn’t, using bitumen brought by rail, about 700 carloads a day.
In the early 2000s, experts were talking about peak oil, that time when maximum petroleum extraction is reached, followed by a decline until the world runs out of oil, reason for a country to keep its petroleum for its own use. Global production did reach an all-time high in 2005, then started to decline, but with the development of new fields and especially new methods of extraction, production has rebounded.
Now the talk is about the market glut and how the U.S. (Canada’s biggest customer) is looking to be self-sufficient in oil and gas. Alberta’s oilsands alone contain petroleum reserves measured in the trillions of barrels.
It looks as if we’re not going to be running out of oil for a while. From that perspective, it makes sense to seek foreign markets for Canada’s resources, thereby benefiting the domestic economy. Yet the eastern part of the country still imports its petroleum. Why not build a pipeline eastward, and establish refinery capacity there? Canadian jobs would result and Canadians would be using Canadian petroleum.
Still, despite the apparent abundance of petroleum, it’s a finite resource and, at some point, Canada will need it. Even if alternative sources of energy are found, petroleum is used in the manufacture of many useful products — future generations might well ask why we burned it.
Many efforts are underway to develop cleaner sources of energy, but Black’s proposal recognizes the reality that, for the time being, we live in a petroleum-dependent world. His optimism and ambition notwithstanding, he has a challenge to convince British Columbians, including First Nations who will be directly affected, that the benefits will outweigh the risks.
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