Chinese thirst for crude threatens Burnaby Refinery, Premium paid to fuel Asia cuts


dumpthemonarchy
#1
Layoffs will likely be coming in March the article states and the plant may close. I'm developing a big problem with global capital. It is CANADIAN OIL. It does not belong to Asia, Alberta or big corporations.

NAFTA and free trade agreements were made to stimulate economic activiity, that is not necessary any longer with the dynamic BRIC nations. Communism is dead and capitalism now needs to be managed by the state for the primary benefit of Canadians, not the global investor class who do not care about local jobs. The price of gas will rise even more in Vancouver, which has the highest prices in Canada, $1.28 a litre.

Overall, we are facing slower economic growth, higher prices and fewer jobs. By shipping oil and unprocessed resources to Asia we are shipping economic growth in Asia. Time to stop being capitalist flunkies and take control of our valuable resources and keep the value added production here.



Chinese thirst for crude oil threatens Burnaby refinery (external - login to view)



Chinese thirst for crude oil threatens Burnaby refinery



Premium paid to fuel Asia cuts off local supply



By Peter O'Neil, Vancouver Sun February 2, 2012 7:20 AM





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The viability of the Chevron refinery in Burnaby, the source of about a third of the transportation fuel in the Lower Mainland, is threatened because it is being outbid for oil by super-refineries in Asia.

Photograph by: Ian Smith, PNG Files, Vancouver Sun




Chevron, the operator of Burnaby's oil refinery, is "closely" monitoring its cost of acquiring crude oil amid fears that China's thirst for Canadian oil - and willingness to pay a premium - may result in local job losses.

Ray Lord, a Chevron spokes-man at the refinery, said in an interview that the company is monitoring "very, very closely" the costs of feeding the refinery, which opened in 1935 and employs 250 people. The refinery supplies about a third of the transportation fuel in the Lower Mainland and is capable of processing 55,000 barrels of crude oil a day into gasoline, diesel, jet fuel and asphalt.

Energy firm Kinder Morgan has applied for National Energy Board approval to more than double its pipeline capacity from Alberta to Burnaby from 300,000 barrels a day to 700,000 a day. Burnaby-Douglas NDP MP Kennedy Stewart and the spokesman for a union that represents workers at the refinery say the pipeline expansion threatens the Burnaby operation's future.

Lord wouldn't discuss negotiations with Kinder Morgan or any specific challenges relating to competition with foreign buyers of Canadian crude.

"This refinery has been a very key piece of the fuel picture here for many, many years and it's one we would like to continue doing," Lord said. But he couldn't provide a clear assurance about the Burnaby facility's long-term viability.

"I don't have a crystal ball, but our intention is certainly to explore all the options we can to maintain a viable ongoing business here."
That viability is threatened by intense competition from so-called super refineries in Asia, warns Stewart, who has instigated a series of hearings by the House of Commons natural resources committee into the state of Canada's refinery sector.

MPs were told Tuesday by government and industry officials that, despite surging production from Canada's oil-sands, refineries are operating below capacity and are struggling to compete against super-refineries in India and China.

"Chevron is being outbid for the oil, because there are more bidders coming into the pro-cess," Stewart said in an inter-view, citing conversations with the company and with the Communications, Energy and Paperworkers Union of Canada.

He said the company is, ironically, facing tougher times if Kinder Morgan gets the green light to double its pipe-line capacity. "If it goes up to 700,000 barrels . that whole 700,000 will be open for inter-national bidding, and they'll be outbid. They won't be able to get any stock," Stewart said. "So, ironically, expanding the pipe-line kills the local refinery."

Russ Day, a spokesman for the Communications, Energy and Paperworkers Union of Canada, which represents about 140 workers at the Burnaby refinery, said the union has been told to expect reduced operations in March.

Day said Chevron recently lost out in its bid for 20,000 barrels a day of crude from the Kinder Morgan pipeline, a major set-back for an operation with a maximum capacity of 55,000 barrels a day.

"It gets to the point where, if you don't have enough crude oil, you can't run the refinery properly," said Day, secretary-treasurer of CEP local 601.

"It could eventually render the plant inoperable."

Alberta Conservative MP Leon Benoit, chairman of the Tory-dominated natural resources committee, acknowledged in an interview that the move to open up Asian markets to Alberta oilsands crude could cause problems for Canadian refineries.

The main argument in favour of proposals like the Kinder Morgan expansion and Enbridge Inc.'s proposed Northern Gateway pipeline to Kitimat is to ensure that the price for Alberta's bitumen isn't discounted because the market is confined only to American buyers.

"When you are looking at the good of the country, . why shouldn't Albertans start to get for their crude a market price that really reflects what oil is worth in the world?" Benoit, MP for Vegreville-Wainwright, said. "We've been getting screwed [because] of no competition to the American market."






 
captain morgan
#2
Quote: Originally Posted by dumpthemonarchyView Post

I'm developing a big problem with global capital. It is CANADIAN OIL. It does not belong to Asia, Alberta or big corporations.

Your hose is built on 'Canadian land'.. Does it magically belong to the people of Canada?
 
dumpthemonarchy
#3
Quote: Originally Posted by captain morganView Post

Your hose is built on 'Canadian land'.. Does it magically belong to the people of Canada?

Why would my house belong to all Canadians? We have a syste that permits people to get their own house, we might share, using the market. Other Candians probably wouldn't want my house.
 
captain morgan
#4
Quote: Originally Posted by dumpthemonarchyView Post

Why would my house belong to all Canadians? We have a syste that permits people to get their own house, we might share, using the market. Other Candians probably wouldn't want my house.


By the very same logic that recognizes 'Canadian oil'.
 
dumpthemonarchy
#5
I didn't put the oil in the ground, I'll grant you that, but it is considered Canadian property and no other country can waltz in and take what it wants. We did sign away energy property rights with NAFTA and free trade treaties , but like aboriginal treaties, they are not cast in stone. Canada is a sovereign nation and we can change treaties if we wish and we can and we should here.

But I did pay and continue paying for my house and I have some exclusive rights to it. Not you, or anyone esle can walk in without my permission.
 
captain morgan
#6
Quote: Originally Posted by dumpthemonarchyView Post

I didn't put the oil in the ground, I'll grant you that, but it is considered Canadian property and no other country can waltz in and take what it wants.

The Chinese are buying the crude, they aren't 'taking' anything.

You want the crude, then belly-up to the bar and put your money down.

Quote: Originally Posted by dumpthemonarchyView Post

But I did pay and continue paying for my house and I have some exclusive rights to it. Not you, or anyone esle can walk in without my permission.

.. And the groups that did pay, and continue to pay the royalties and development costs also have rights to the fruits of their labour.... Are ya getting the picture here?
 
TenPenny
#7
Hello, Mr Trudeau. It's the ghost of NEP, come back to scare the Albertans.
 
dumpthemonarchy
#8
Quote: Originally Posted by captain morganView Post

The Chinese are buying the crude, they aren't 'taking' anything.

You want the crude, then belly-up to the bar and put your money down.

.. And the groups that did pay, and continue to pay the royalties and development costs also have rights to the fruits of their labour.... Are ya getting the picture here?

Seems like you've given up on the house.

Right now, we pay the WTI price for crude oil, which is $12 less than the Brent price, $100 versus $112. Energy & Oil Prices: Natural Gas, Electricity and Oil - Bloomberg (external - login to view). So China and India are going to pay more for oil, thanks to the USA who will not pay the world price set elsewhere. The West Texas Internediate price is too low, so we will always get outbid. We pay the world price for copper and zinc, why not oil?

Those foreign oil companies can still get a return on their investment, but over a longer term. Like investment salesmen say and its written on the ads and packages, returns are not guaranteed. The world is changing and business has to adjust. Prez Sarkozy of France has correctly said that laissez-faire economics is dead. The fact our fed govt is a flunkie of corporate interests is not my fault. No rights are absolute.
 
captain morgan
#9
Quote: Originally Posted by dumpthemonarchyView Post

Seems like you've given up on the house.

Nope... i was using that stream of logic to rebut your comment about "Canadian oil'. The oil is located here, just like your house, but that doesn't imply that everything located in Canada belongs to all Canadians equally.

Quote: Originally Posted by dumpthemonarchyView Post

Right now, we pay the WTI price for crude oil, which is $12 less than the Brent price, $100 versus $112. Energy & Oil Prices: Natural Gas, Electricity and Oil - Bloomberg (external - login to view). So China and India are going to pay more for oil, thanks to the USA who will not pay the world price set elsewhere. The West Texas Internediate price is too low, so we will always get outbid. We pay the world price for copper and zinc, why not oil?

You can't blame the Americans for the difference between Brent and WTI pricing.

That said, WTI is a benchmark based on a quality of oil out of Cushing Oklahoma. Here in Alberta, you'll also have local benchmark pricing based on the quality and properties of the oil (Edmonton and Hardisty come to mind).

The notion that China is willing to pay more for the oil is more of an expression of the level of demand that they have in Asia. It appears that they really want larger volumes and the only way to get it is by offering more for the resource.

Quote: Originally Posted by dumpthemonarchyView Post

Those foreign oil companies can still get a return on their investment, but over a longer term.
Like investment salesmen say and its written on the ads and packages, returns are not guaranteed. The world is changing and business has to adjust. Prez Sarkozy of France has correctly said that laissez-faire economics is dead. The fact our fed govt is a flunkie of corporate interests is not my fault. No rights are absolute.

I have no idea what you mean here, but the facts come down to this. The investment dollars that are directed into Canadian petroleum are coming from all over the globe and that money seeks to generate the best possible ROI.

BTW - love the comment from Sarkozy; it's pretty rich considering that the French economy is extremely over-exposed and if Greece were to queer the deal in their repayment of debt, France's biggest bank - and possibly the gvt itself - may find themselves in a very unfortunate position.

As for Harper, it appears that his policies have resulted in Canada being in the best fiscal shape of all the G-20 nations... You might want to think about that next time you complain about how bad things are here in Canada
 
Liberalman
#10
Is Harper ready to bring in NEP and force a better price for Canadians and sell it at world prices in the global market place?

What better a way to jump start the economy and create more Canadian jobs with cheaper fuel prices going to Canadian industry.

The Canadian manufacturers can produce Canadian made goods on a competitive level.

Harper’s Conservative will do it just because they have a strong majority.
 
captain morgan
#11
Didn't work-out too well last time.
 
TenPenny
#12
Quote: Originally Posted by LiberalmanView Post

Is Harper ready to bring in NEP and force a better price for Canadians and sell it at world prices in the global market place?

What better a way to jump start the economy and create more Canadian jobs with cheaper fuel prices going to Canadian industry.

The Canadian manufacturers can produce Canadian made goods on a competitive level.

Harper’s Conservative will do it just because they have a strong majority.

No they won't, they aren't insane.
 
dumpthemonarchy
#13
Quote: Originally Posted by captain morganView Post

Nope... i was using that stream of logic to rebut your comment about "Canadian oil'. The oil is located here, just like your house, but that doesn't imply that everything located in Canada belongs to all Canadians equally.



You can't blame the Americans for the difference between Brent and WTI pricing.

That said, WTI is a benchmark based on a quality of oil out of Cushing Oklahoma. Here in Alberta, you'll also have local benchmark pricing based on the quality and properties of the oil (Edmonton and Hardisty come to mind).

The notion that China is willing to pay more for the oil is more of an expression of the level of demand that they have in Asia. It appears that they really want larger volumes and the only way to get it is by offering more for the resource.



I have no idea what you mean here, but the facts come down to this. The investment dollars that are directed into Canadian petroleum are coming from all over the globe and that money seeks to generate the best possible ROI.

BTW - love the comment from Sarkozy; it's pretty rich considering that the French economy is extremely over-exposed and if Greece were to queer the deal in their repayment of debt, France's biggest bank - and possibly the gvt itself - may find themselves in a very unfortunate position.

As for Harper, it appears that his policies have resulted in Canada being in the best fiscal shape of all the G-20 nations... You might want to think about that next time you complain about how bad things are here in Canada

There are levels of ownership and if the police get a warrant they can come into my place. Or firemen come in when there is a fire.

The newspaper article never went into details how much more the Chinese are willing to pay. I would say much more as they have super-refineries to supply. This is wholesale business, not retail, so the details are very murky and it is hard to find out exactly what is going on.

Of course we can blame Americans for the lower price, if it was stated in the contract that Canadian crude had to be sold at the highest world price, they would have to pay it. It would be called forcing terms on them to get a deal. Alberta, always wanting to be palsy-walsy with Americans, would never do such a thing. We're getting short changed and shafted here, and much of it is our own fault.

====================

More calls for Canada to grow its energy upgrading and refining business - 660News (external - login to view)
 
TenPenny
#14
Quote: Originally Posted by dumpthemonarchyView Post

There are levels of ownership and if the police get a warrant they can come into my place. Or firemen come in when there is a fire.

Did you not just say that nobody could come in your house without your permission, and now you say different.
 
taxslave
#15
Quote: Originally Posted by LiberalmanView Post

Is Harper ready to bring in NEP and force a better price for Canadians and sell it at world prices in the global market place?

What better a way to jump start the economy and create more Canadian jobs with cheaper fuel prices going to Canadian industry.

The Canadian manufacturers can produce Canadian made goods on a competitive level.

Harper’s Conservative will do it just because they have a strong majority.

Seems to me that oil belongs to the provinces, not the feds. That is what caused the uproar last time easterners tried to steal resources.
That being said we do need a Canadian price related to production cost for domestic needs and any excess could be sold on the open market. Perhaps an export tax equal to the difference between production cost and world price. That would keep speculators out of the market.
 
L Gilbert
#16
Quote: Originally Posted by dumpthemonarchyView Post

Layoffs will likely be coming in March the article states and the plant may close. I'm developing a big problem with global capital. It is CANADIAN OIL. It does not belong to Asia, Alberta or big corporations.

lol Ever heard of mineral rights as passed by CANADIAN Legislature?

Well at least you're being colorful.

He can't just rant about "red" people, he's gotta rant about "yellow" people now.
 
dumpthemonarchy
#17
Quote: Originally Posted by taxslaveView Post

Seems to me that oil belongs to the provinces, not the feds. That is what caused the uproar last time easterners tried to steal resources.
That being said we do need a Canadian price related to production cost for domestic needs and any excess could be sold on the open market. Perhaps an export tax equal to the difference between production cost and world price. That would keep speculators out of the market.

The NEP drove Albertans nuts because Ontario/Quebec wanted and got oil below the world price and robbed Alberta of billions. I say keep the world price as is for all sales of oil, don't have two prices.

We have to have first dibbs on the resource. I hear "This is Alberta's oil, or it's the world's oil." It is a strategic resoirce, it is Canadian oil. Our constitution was made in the 19th century, before oil became a critical resource.
 
captain morgan
#18
Here's the skinny on the oil-starved refinery in Burnaby.

Chevron owns the refinery.
Chevron is also part of the syndicate that is prepared to build the p/l to Kitimat.
Chevron also has interests in oilsands properties.

You can do the math on this.
 
dumpthemonarchy
#19
Quote: Originally Posted by captain morganView Post

Here's the skinny on the oil-starved refinery in Burnaby.

Chevron owns the refinery.
Chevron is also part of the syndicate that is prepared to build the p/l to Kitimat.
Chevron also has interests in oilsands properties.

You can do the math on this.

No numbers here such as prices. What it's really all about is power and geopolitical calculations. Chevron, like all corporations, get their charter to operate and exist from the govt. It's very easy to dissolve a corporation, merge it, move it, sell it, trade it. You can easily fire employees in a corporation, try to fire a Canadian, oops, you can't.
 
captain morgan
#20
Quote: Originally Posted by dumpthemonarchyView Post

What it's really all about is power and geopolitical calculations.


I think that it is far simpler than that... It's about money, plain and simple.
 
dumpthemonarchy
#21
Quote: Originally Posted by captain morganView Post

I think that it is far simpler than that... It's about money, plain and simple.

To about, say, zero countries in the world, it's only about money. Even the fed govt, a conservative govt halted the potash takeover last year. It turned down billions of dollars entering the country. Oh yeah, they need votes from Sask, and not all those voters are millionaires yet. Workin' on it though.
 
captain morgan
#22
Quote: Originally Posted by dumpthemonarchyView Post

To about, say, zero countries in the world, it's only about money. Even the fed govt, a conservative govt halted the potash takeover last year. It turned down billions of dollars entering the country. Oh yeah, they need votes from Sask, and not all those voters are millionaires yet. Workin' on it though.


Ok, if you say so.

That said, get the Feds in on forcing Chevron to buy the crude at higher prices to keep the refinery going.
 
dumpthemonarchy
#23
Quote: Originally Posted by captain morganView Post

Ok, if you say so.

That said, get the Feds in on forcing Chevron to buy the crude at higher prices to keep the refinery going.

It's just about the money, fools!

So we just passively keep losing refining capacity to other countries, despite having the natural resources.
 
petros
#24
Quote: Originally Posted by dumpthemonarchyView Post

It's just about the money, fools!

So we just passively keep losing refining capacity to other countries, despite having the natural resources.

Should we use Action Plan money from Beijing to build pipelines from AB-SK to supply BBY Chevron instead of it coming from Alaska?
 
dumpthemonarchy
#25
Quote: Originally Posted by petrosView Post

Should we use Action Plan money from Beijing to build pipelines from AB-SK to supply BBY Chevron instead of it coming from Alaska?

possibly
 

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