Newspaper publisher David Black speaks during a conference announcing a plan to build a $13B oil refinery in BC.
Credits: REUTERS/Ben Nelms
VANCOUVER — A British Columbia newspaper publisher made a stunning and unlikely announcement in Vancouver on Friday of his plan to build a $13 billion oil refinery in Kitimat, B.C., eliminating the need to ship heavy oilsands bitumen to Asia.
"I've solved the offshore problem here," said David Black, the owner of Black Press Group Ltd., referring to concerns about a potential tanker spill of heavy oil that have dogged Enbridge's Northern Gateway pipeline proposal. The environmental impact of a gasoline spill would be far less severe, he said, while acknowledging he has no practical experience in the oil and gas industry.
The refinery would be the largest in Canada, capable of processing 550,000 barrels per day of oilsands diluted bitumen, or the total daily capacity of Northern Gateway. Black said the project would add value to oil exports from B.C., creating 6,000 construction jobs from 2014 to 2020, and 3,000 permanent jobs.
Black said he will submit an environmental assessment application with the province as early as next month. He will personally fund that process, but not the rest of the project.
"This is a $13 billion deal, so I'm not kidding myself," said Black. "I'm not going to have any significant part of this refinery. I see myself as more of a catalyst to get the industry to do it."
When asked how a new refinery in Kitimat could be financially viable when so many refineries have shut down in the Metro Vancouver region, consulting engineer Glenn McGinnis said, "They suffer from economy of scale. They're too small. Their fixed cost per barrel is too high to be competitive against very large refiners."
Black said the proposed refinery would depend on access to Northern Gateway's oil supply, but Enbridge and its oil producing partners have not endorsed his project.
"Is Enbridge rooting for me? Probably not," said Black. "They have nine producing partners ... some of whom don't want a refinery ... I'm pretty sure they're worried about leverage in negotiations. If they have to sell to one refinery, that refinery has a lot of power to negotiate."
However, Black said one positive outcome of his efforts would be to convince oil producers to take ownership of the refinery themselves.
"I feel this project will change the face of the northwest (B.C.) forever, if it's successful and goes ahead," said Kitimat Mayor Joanne Monaghan, who called in to the press conference to offer her support.
"I'm not guaranteeing that we'll get it off the ground," said Black. "But I sure like this proposal a lot more than the existing proposal, where we put in a pipeline, we don't get much out of it, and we're sending diluted bitumen in tankers down channels ... It's rare, but if it (a spill) happens, it's a bloody mess."