Oil Industry Experts Quickly Dismiss David Black's Idea of Building a Refinery in Kitimat as Naive

Across Canada today the media is all over yesterday's announcement by newspaper tycoon David Black that he wants to build a refinery in Kitimat, the western terminus of the proposed and widely opposed Northern Gateway Pipeline, to process the raw Tar Sands crap before it's shipped off through Douglas Channel to foreign markets. The Calgary Herald's article titled 'Caution and skepticism greet publisher's proposed Kitimat refinery', quotes many industry experts and insiders who are nearly unanimous in dismissing Black's plan as naive at best for many ecomonic and technical reasons.

In the Vancouver Sun's piece Grand Chief Stewart Phillip, Union of B.C. Indian Chiefs president says, "This doesn't change anything, we are still faced with the spectre of a very high-risk pipeline going through rugged terrain and being sponsored by a company that has an absolutely atrocious safety record." The Ottawa Citizen's article quotes Josh Paterson, staff lawyer at West Coast Environmental Law, who doubts the refinery proposal will succeed, as saying in part, "I don't see this going anywhere. There are no backers, no support, no financing in place. It seems like a pretty cockamamie idea to me. It's a rather desperate attempt to salvage a pipeline project that's clearly going down the tubes in public opinion."

Black himself acknowledges he has no support from oil producers, no financial backers, no partners and has not discussed the idea with potential Asian customers. His only real statements about what industry insiders saying jn terms of the economics not adding up is his proposal to reduce capital costs from Canada's high labour rates by building refinery modules offshore to be shipped to Kitimat. One thing Black's proposal does though is drive another nail in the coffin of the entire puppet show by acknowledging that shipping raw Tar Sands crap [bitumen] is a lot more dangerous than shipping refined products.

Here's a few of the ecomonic reasons why the oily-garchs prefer transporting raw crude, be it Tar Sands crap or not, to distant refineries located near the population and industrial hubs that will eventually comsume the refined products. First, is that 8 pipelines or tankers or whatever would be needed to ship the 8 different types of refined oil products that are in crude oil. You can't transport gasoline in the same pipeline as diesel or kerosine [jet fuel]. But you can if they are all still mixed in crude oil. Another big factor up here in Canuckistan is the combination of high labour rates, the more costly to comply with environmental regulations and the 'Dutch Disease' over-valued looney that makes it far cheaper to build and operate refineries in Asia, Texas or just about anywhere else. Then there's the fact that it takes at least 7 years to get approveral to build refinery in Canada which would put any possible refinery operation far behind the proposed Kitimat/Northern Gateway project.

So, it looks like this idea of Black's is just hot-air but i doubt it will be the last attempt by the oily-garchy to bribe British Columbians into selling the future of their natural heritage for a few shiny bobbles as BC Premier Christy Clarke would have us do.  Hoefully we here in BC won't agree with Christy and end up being, in Oscar Wilde's words, a people who know the "cost of everything and the value of nothing?"