B.C. community newspaper publisher David Black has floated the idea of building a $13-billion refinery near Kitimat to reframe the discussion on the Northern Gateway oil pipeline by promising 10 times as many jobs and eliminating the shipment of oil off the coast.
The idea is to process all of the 550,000 barrels a day of Alberta oilsands bitumen from Enbridge’s controversial Northern Gateway project in the refinery, and then ship refined oil products such as gasoline, diesel and kerosene. Black argues if there was a tanker spill, the refined products would cause less environmental damage because they float and evaporate.
Black hopes his proposal will temper opposition from British Columbians and first nations, many of whom have rejected the $6-billion project because they say the economic rewards for B.C. are not great enough to offset the risk and consequence of an oil spill.
See more David Black photos here
Last month, B.C. Premier Christy Clark also declared the province would not even consider the Northern Gateway project unless it gets a much greater share of the economic benefits.
Black acknowledged he has no support from oil producers, who are seeking higher investment returns from shipping and selling crude offshore.
He said he has no financial backers, no partners and has not discussed the idea with potential Asian customers. He has had only brief discussions with a pair of first nations in the Kitimat area.
Black, who owns more than 150 newspapers in Western Canada and the U.S., made it clear he would not be investing in the refinery himself, noting even a one-per-cent stake would cost $130 million.
Still, he said he believes support and financial backing can be found for the refinery and that people will listen to him.
The publisher described himself as a “quiet environmentalist” whose “nation-building” proposal would benefit the province by reducing environmental impact, creating jobs and securing economic benefits from developing the controversial pipeline.
“I’m hoping this will jump-start a change in the debate,” he told reporters at a press conference in downtown Vancouver.
“In other words, instead of just saying ‘no,’ let’s say ‘how can we work with this to our advantage — get a lot out of it and solve potential problems at the same time.’ ” Black said he has support for the concept from Enbridge CEO Pat Daniel, although the Calgary-based company declined to comment Friday.
The proposed refinery site is 3,000 hectares of industrial-zoned Crown land 25 kilometres north of Kitimat known as Dubose, which Black does not own. He has reserved a name for a company, Kitimat Clean Ltd., but has not incorporated the company.
Black plans to submit an environmental assessment application to B.C. regulators next month, using his own money, which he estimates will cost a few million dollars.
The proposed refinery in Kitimat would provide as many as 3,000 permanent and contract jobs, 10 times more jobs than an export pipeline, he said.
Another 6,000 workers would be hired during a five-year construction period.
In comparison, the Northern Gateway pipeline is estimated to create about 350 permanent and contract jobs in B.C., as well as thousands more during its three-year construction phase.
Black said he has briefed Premier Clark, but the province hasn’t told him what its position on his proposal is yet.
On Friday, a statement from B.C. Energy Minister Rich Coleman’s office said the province looks forward to seeing more details on the refinery.
Black also briefed staff at the Prime Minister’s Office, who encouraged him to propose the project, he added.
Natural Resources Minister Joe Oliver said Friday the federal government welcomes any project that boosts Canadian exports and jobs, but he wouldn’t pass judgment on the idea.
“If he’s serious, it’s presumably because he’s pushed the numbers and come to a case. But I’m not in a position to know whether this is likely or not,” said the minister, who learned about the proposal through media.
Black’s proposal, which would have the refinery approved by regulators and operational by 2020, was met with skepticism among industry players and observers, and rejected by critics of the Gateway project.
Black was confronted at the press conference by Coastal First Nation executive director Art Sterritt, who warned the publisher should consult with first nations before filing an environmental assessment application.
“Otherwise you are wasting your money.”
Does the refinery proposal affect your stance on the pipeline?
Sterritt lauded Black in an interview for acknowledging that shipping oil off the coast was not a good idea, but said a refinery brings a suite of new problems, including air pollution in the pristine Kitimat Valley.
The Yinka Dene Alliance in northern B.C., said it remains opposed to the project.
The alliance represents five first nations whose claimed traditional territory encompasses 25 per cent of the pipeline route. “I don’t know how many times we have to say no. [This idea] is another wolf in lamb’s clothing,” said the alliance’s Geraldine Thomas-Flurer.
Josh Paterson, staff lawyer at West Coast Environmental Law, said Black’s announcement caught the environmental movement off guard.
“People are floored by this. Where is this coming from? In terms of building trust and relationships, this is the wrong way to go.”
University of Calgary public policy professor Michal Moore said it is “naive” to think a refinery would be built near Kitimat.
The Asian market is not looking for refined products, but oil, he said. It would also be virtually impossible to mobilize the labour force and infrastructure in a “tiny place” such as Kitimat to support a refinery.
The associations representing Canadian oil producers and refiners offered modest support.
“The thing that’s key for us as producers is the need for market access,” said Greg Stringham, vice-president of the Canadian Association of Petroleum Producers. “Any concept that helps facilitate that discussion is worth looking at.”
John Skowronski, director of government and stakeholder relations for the Canadian Petroleum Products Institute, called Black’s plan “an interesting proposal.”
“But at this point it’s sort of a trial balloon if you will.” he said.
The federal and provincial New Democratic Party and union leaders — who have long opposed oilsands pipelines, partly because they believe bitumen should be upgraded and processed in Canada — were skeptical if not outright hostile to the idea.
“I don’t think it changes anything in terms of public opinion in B.C. against the Northern Gateway project,” NDP natural resources critic Peter Julian said. “The pipeline still threatens thousands of jobs in the fisheries and in tourism.”
B.C. NDP energy critic John Horgan said Black’s proposal does nothing to change his party’s objections to the Northern Gateway, nor to the idea of increasing tanker traffic on the north coast.
Alberta Federation of Labour president Gil McGowan said his organization has always favoured keeping refining jobs in Canada rather than effectively exporting jobs, along with unprocessed bitumen, to other countries.
“But we are not convinced this is a credible proposal,” he said. “Is this a real proposal or is it simply a ruse to help get the pipeline built?”
The proposed Northern Gateway pipeline is meant to open up new markets for crude from the Alberta oilsands, breaking the reliance on the U.S. market, and fetching a higher price — an estimated $15 billion more a year — for Canada’s oil.
Black argued that goal can also be achieved with a coastal refinery with access to Pacific Rim markets.
There would also be about 30-per-cent fewer tanker loads out of Kitimat because the diluent used to thin bitumen piped to Kitimat would be stripped out during refining and sent back to Alberta via pipeline. Black also argued that building the refinery in B.C. will ensure it is a state-of-the-art facility with a lower environmental footprint than if it were built in other areas.
While it would produce about seven million tonnes of carbon dioxide emissions, those emissions would have been produced anyway, he said.
Read more: B.C. newspaper tycoon proposes $13-billion oil refinery for Northern Gateway oil (with poll)
