Re­fin­ing be­gins at home, and it’s time we be­gin again

Alberta Oil - - CONTENTS - Nick Wil­son nwil­son@al­ber­

Politi­cians like med­dling in

markets. So here’s one I’d like Ot­tawa to tinker with and cre­ate a win-win­win sit­u­a­tion for oil work­ers, the en­vi­ron­ment and tax pay­ers—re­fin­ing. Tilt­ing the play­ing field back to Canada so more Prairie crude gets pro­cessed in the At­lantic-ac­cess prov­inces. It would im­prove the trade bal­ance, cre­ate jobs, re­coup the gov­ern­ment in­vest­ment through the re­sult­ing cor­po­rate tax top-up of provin­cial and fed­eral cof­fers, and re­duce emis­sions.

Nor­mally I’m in fa­vor of let­ting Adam Smith’s unseen hand do most of the work. But in a world of trad­ing blocs, car­tels and crit­ics who se­lec­tively choose which na­tion’s oil tankers to throw rot­ten eggs at, I’d like our lead­ers to even things up a lit­tle.

The win­ning combo would in­clude: an Eastern car­bon price that im­pacts Cana­dian com­peti­tors too; an En­ergy East pipe­line ap­proval; and in­cen­tives to re­fin­ers on its route to up­grade their plants to take some bi­tu­men. And while they’re at it, our gov­ern­ments can give these re­fin­ers a nudge to reach for the bar set by Al­berta’s Stur­geon re­fin­ery— Canada’s clean­est—whose SOx, NOx and car­bon con­trols are way ahead of the curve. The Con­fer­ence Board of Canada says the $8.5 bil­lion com­plex’s op­er­a­tions phase will in­crease Canada’s GDP by $2.3 bil­lion, cre­ate 6,658 jobs across the econ­omy, and gen­er­ate $385 mil­lion a year in gov­ern­ment rev­enues—si­lenc­ing crit­ics over the gov­ern­ment help it re­ceived. But first, credit where credit is due.

Prime Min­is­ter Justin Trudeau is green­light­ing pipe­lines de­spite his strange com­ments about phas­ing out the oil sands.

Car­bon pric­ing is here whether we like it or not. China in­tro­duces a na­tional car­bon trad­ing scheme this year, join­ing those U.S. states that have car­bon pric­ing, in­clud­ing Cal­i­for­nia, a ma­jor oil pro­ducer and re­finer that will wel­come Al­ber­tan crude via the Trans Moun­tain pipe­line ex­pan­sion. But Eastern Cana­dian car­bon pric­ing also needs to tar­get source emis­sions, no mat­ter which coun­try they come from, and dis­count any up­stream car­bon price al­ready paid. So Nige­rian and Bakken flar­ing and Saudi tanker emis­sions would all be cov­ered by well-to-wheel car­bon pric­ing that cuts Al­ber­tan firms some slack as they’ve al­ready paid up.

Al­berta, un­der right and left gov­ern­ments, some­times with fed­eral help, has sup­ported petro­chem­i­cal and re­fin­ing de­vel­op­ment and is eye­ing more up­grad­ing ca­pac­ity. The 1.1 mil­lion b/d En­ergy East can trans­port both up­graded syn­crude, and bi­tu­men which could be pro­cessed in the east in low-car­bon-emis­sion up­graders. Eastern Canada al­ready ex­ports some of the world’s clean­est power, so why not fol­low the western prov­inces’ global lead­er­ship in clean re­fin­ing? If the po­lit­i­cal ground­work is done first, and done skill­fully, this push could be given with cross-party sup­port. The world’s clean­est plants pro­cess­ing oil from fields op­er­at­ing un­der world-class reg­u­la­tions would un­der­line the Al­ber­tan ideal that “the world needs more Canada.”

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