The case for the Kitimat refinery

Last year Canada’s trade deficit was $12-billion — compared to a $45-billion surplus in 2007.

CIBC’s deputy chief economist, Benjamin Tal, has defined our national challenge: “The volume of Canadian exports today is at the same level it was a decade ago. Regardless of how you look at it, this was a lost decade for Canadian exports. “

I believe Canadians — and British Columbia, in particular — can do something about this worrying trend.

I have been in Beijing in recent weeks to sign a memorandum of understanding with the Industrial and Commercial Bank of China, the largest bank in China, to finance a $15-billion oil refinery on Canada’s west coast. This MOU states that China will finance the refinery and find markets for all of its output. My company, Kitimat Clean, will build this state-of-the-art refinery in Kitimat, B.C. The economic benefits for Canada are enormous. The Kitimat refinery will process 550,000 barrels per day of diluted bitumen from the Alberta oil sands, delivered to the site by an environmentally acceptable pipeline (my preference) or by rail. The bitumen will be processed there into value-added fuel products the world needs: 100,000 barrels per day of gasoline; 50,000 of jet fuel and 250,000 of diesel fuel.

With export revenue of roughly $16-billion a year, the refinery will more than balance the country’s trade deficit. In addition, by alleviating some of the supply/demand imbalance for Canadian petroleum, we will also help reduce the $25-billion in annual discounts now given by Canadian producers to U.S. refineries.

For British Columbia, the project has equally large benefits. There will be 6,000 jobs created for the first five years of construction. Subsequent permanent employment will be on the order of 3,000 jobs a year for the duration of the refinery’s operating life of 50 to 100 years. Taxes generated for government could amount to $1-billion per year.

A state-of-the art, West coast refinery has some key competitive advantages for Asian markets. We

Clean and safe, a new petroleum facility in B.C. would erase Canada’s trade deficit and create thousands of jobs

have local supplies of inexpensive natural gas to fuel a refinery and a reliable, long-term supply of lowpriced bitumen from Alberta. Supply lines from Canada’s west coast to Asia are nine days shorter than from the Middle East. They are three weeks shorter than from the Gulf Coast.

There are also some key environmental advantages of a Kitimat Refinery that will cement Canada’s reputation as a global leader in cleaner energy.

We will avoid the shipment of bitumen in tankers off the B.C. coast, which has been opposed by a majority of British Columbians. If there were a tanker spill, bitumen would be very difficult to clean up because it is heavy enough to sink. Refined fuels, while damaging, will float and evaporate.

The refinery I am proposing will also be the cleanest in the world. It will meet B.C.’s rigorous air and water regulations. Furthermore Kitimat Clean Ltd. is investigating a new, Canadian-made Fischer Tropsch process that would cut greenhouse gas emissions in half compared with conventional heavy oil refineries.

If we build this Canadian West Coast refinery, we will also replace another, less-clean refinery that would otherwise be built to meet the world’s continuing demand for refined petroleum products. Yes, West Coast-refined gasoline, diesel and jet fuel will produce greenhouse gases when consumed. But their production cycle will make them the greenest such fuels on the market for our energy-hungry world.

A West Coast refinery would only be feasible if a sustainable method is created to get bitumen to the refinery, meaning a new pipeline proposal is essential to winning the support of British Columbians and First Nations. This is a genuine obstacle, but one we are confident can be overcome as more British Columbians learn the details of our proposal. A recent Mustel Group poll found the majority of British Columbians are behind a refinery if bitumen can be delivered to it in a safe manner.

It is time for Canadians to fully embrace that idea, particularly in British Columbia, where a provincial election is now taking place. I would urge the NDP and Liberal parties to set aside partisan concerns and look at the virtues of this project. Let’s make Canada a leader in producing the world’s cleanest fuels. Let’s add billions of dollars in export value to our national accounts and create thousands of jobs every year. Let’s embrace our role as a responsible, global energy player.