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)
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."