Nice try, but refinery proposal just won’t work

Andre Carrel is a retired public sector administrator living in Terrace, B.C.

I spoke against the Northern Gateway Project in my oral presentation to the Joint Review Panel in May. I have not changed my mind on the project’s merits, but I feel compelled to speak up in support of Enbridge.

Their project raises valid questions about the risks associated with the operation of a pipeline through British Columbia’s rugged northwest super tanker traffic in Douglas Channel.

Enbridge may have embellished some aspects of the project, its impact on local employment, for example, in an effort to gain public support.

But concerning the economics of the proposal, especially from the perspective of corporate gain, Enbridge knows what it is talking about.

Enbridge is a pipeline company. The company’s expertise is in making a profit from building and operating oil pipelines.

Yes, oil has spilled from the company’s pipelines, disastrously so in some instances. The US National Transportation Safety Board labelled Enbridge’s response to one spill as a Keystone Kops operation.

They may have been harsh, but it would be banal to write off the rash of Enbridge spills on the grounds that “accidents will happen,” although accidents do indeed happen in every industry.

Safety training, inspections, and investment in the global scheduled airline industry are extensive and yet, that industry has chalked up fourteen fatal crashes in the past twelve months, killing 498 crew and passengers.

Accidents in any industry do and will continue to happen.

But the subject here is not the pipeline; it is the proposal by a wealthy media personality to build a $13-billion refinery in Kitimat.

This proposal offered two trump cards: massive new employment in the region, and the elimination of bitumen carrying super tankers in Douglas Channel. I had to check my calendar: is it April 1 already?

This refinery proposal falls into the well-meaning but utterly useless “why doesn’t somebody …” category of announcements. Let me compare this refinery announcement with the Northern Gateway pipeline announcement.

Bitumen producers in Alberta were looking for markets, and refiners in Asia (not only China) were looking for crude. In the presence of a secure supply and a strong demand, connecting the two would seem to be child’s play.

Not so fast. If a Northern Gateway pipeline is eventually approved, and that is still a long way from being a certainty, it will have taken a major international pipeline company over a decade to move the project from initial proposal to final approval.

And that’s with an experienced proponent in the pipeline industry.

So what are we to make of the refinery proponent’s announcement?

Let us assume that the refinery gets rapid approval, that it does not run into financing difficulties, that contracts with product vendors and customers are signed, and that the plant is designed and built in record time.

How would a refinery in Kitimat prevent the sale of raw bitumen to any customer in the pacific region?

With the pipeline in place, with Kitimat harbour having the capacity to handle super tankers, and with Douglas Channel navigational aides for such traffic in place, how difficult would it be to get approval for bitumen-carrying super tankers to get permission to enter the channel?

How much time would be needed, and how many hurdles would have to be overcome for the design, engineering, permitting, financing, and construction of a refinery in Kitimat. A decade? Maybe longer?

What about the Northern Gateway pipeline project in the meantime? Should Enbridge be told to shelve that project until the refinery project is guaranteed?

The refinery proposal is a Northern Gateway project distraction. A more likely job-creating economic booster for this region would be to wait for the owners of the Vancouver Canucks to build a plywood plant in Terrace so as to put a halt to raw log exports.

Andre Carrel is a retired public sector administrator living in Terrace, B.C.