Oil debate has now been reframed
David Black has reframed the debate on oil that has been raging in B.C., and for that we should all be grateful.
Discussions have moved from how a proposed pipeline would hurt this province to a more reasoned debate about how B.C. could enjoy more benefits from Alberta oilsands crude.
The owner of this newspaper is, like most people, more than one-dimensional. He is an avid boater, and a lifetime B.C. resident. He loves this province as deeply as anyone.
He has listened to the endless debate about the challenges of shipping crude oil to China, and the heated discussions over the Northern Gateway pipeline project. He is fully aware of Enbridge’s public relations disaster in Michigan in 2010, where a pipeline spewed 20,000 barrels of oil into a river for about 17 hours. The clean-up isn’t finished yet.
As a successful business person, he is well aware of how business works and how to raise funds. So when he put all these varying factors together, and started asking questions, he came up with a creative idea.
If oil is going to be shipped into B.C. via Northern Gateway (and that, as he acknowledges, is a big if), his idea is to create jobs in B.C., and ship refined products to Asia from a new $13 billion Kitimat refinery.
This would create a huge number of construction jobs, and thousands of ongoing, well-paid refinery jobs. It would bring far more tax revenue to B.C. It reduces risks from shipping oil — spilled gasoline and diesel fuel won’t pollute the oceans in the same way heavy oil does. Perhaps the most attractive element of his plan is that it ensures that value is added to a Canadian resource in Canada, not elsewhere.
The oil industry isn’t excited about the idea, as its thinking is shaped by China’s demand for crude oil. It has little interest in B.C. concerns about the environment or tanker spills. It isn’t thinking creatively — it’s operating on a business as usual basis.
Black is putting his money where his mouth is. He is applying for a provincial permit to build the refinery and is paying the costs of that approval process.
However, he acknowledges that the refinery won’t be built without outside financing, and he believes it can be profitable. He says refineries make about 11 per cent on capital, not as much as some aspects of the oil industry, but enough of a return that a project will attract investors. He also says bankers are willing to lend money for such a venture.
He made his refinery idea public on Friday, mainly because he wanted to talk about it in a proactive way, rather than have the discussion dominated by politicians after news of his permit application became public. He has talked to federal and provincial officials and leaders of two First Nations in the Kitimat area. He will be talking to many others.
It’s an ambitious, perhaps even audacious plan. But it is a plan that is worthy of much more discussion. His ideas are well worth considering.
Those seeking more detail on what he has in mind can look at the project’s website, http://kitimatclean.ca.