By Jim Shepard
My initially negative attitude toward an oil refinery at Kitimat was based mainly on my experience of 10 years service on the board of directors of Imperial Oil.
Since I was accustomed to the discussion of petroleum economics centered in Calgary, I saw no need for a refinery in Kitimat. That attitude was based on the fact that there had not been a new refinery built in North America in many years. And any needed increase in petroleum production was achieved by expansion of existing refineries throughout North America. But after my service with Imperial Oil, I went on to serve four years at Canfor which led to my nine visits to China in search of lumber markets.
My exposure to the phenomenal expansion of China’s economy opened my eyes to the true merit of the Kitimat refinery concept. It made me realize that it would not be just another refinery relying on the North America market but rather a refinery that would supply the vast appetite of China for petroleum products.
The challenge will be to draw the attention of Asian investors who would see the value to this investment. It appears that David Black, after many years of effort, is nearing an agreement that could provide the vast capital infusion needed to make this refinery initiative a reality.
Asian countries, especially China, are very interested in securing sustainable supply of resources that will flow freely without undue trade barriers like surprises with taxes, regulations or tariffs.
Canada has a good reputation as a free trade country that can be relied on as a dependable source of supply. Now is a very opportune time to attract the vast investment needed to make the Kitimat refinery go ahead.
David Black, with his years of diligence, deserves our appreciation for displaying the foresight and courage to invest his time, money and reputation to help bring along this huge initiative.
The positive merits of the Kitimat refinery are so profound that this project is really beyond any political persuasion.
Any and all supporters of NDP, Liberal, Conservative or even Green should see the tremendous benefits that would come to B.C. with this project.
This initiative will involve the investment of many billions of dollars. It’s hard for any of us to visualize a million let alone a billion of any thing.
When it comes to the benefits of a petroleum cycle from well exploration to the gas station, the jurisdiction that hosts the refining process enjoys a huge portion of the value addition to the raw material. For this project that would mean several thousand mostly trade union jobs for the multi-year term of the construction phase.
It would also mean the creation of over 3,000 permanent jobs for the operation and supply support of the refinery when running.
This refinery would be processing 175 million barrels per year which means the tax revenue that could go toward healthcare, education, vital services for the disabled and elderly would be immense.
But job creation and tax revenue is not the only desirable feature. It also would provide much lower risk to the marine environment. The shipments out of the refinery would be finished product like aviation fuel, gasoline and diesel These products if ever spilt would have much less impact on the marine environment. They would also be transported in smaller ships.
I know there are those on both sides of the political aisle that address this as a political issue. And I would disagree with both.
This is a project that can be attractive to all political stripes. Trade unions would see a significant increase in jobs and memberships. Hospitals and schools across the province would see an improvement in government funding.
Based on the huge positive impact this initiative could have on BC, I think the question should not be if we want it….but rather, how can we help make sure that the petroleum world sees this as an attractive way to invest billions of shareholder capital.
Jim Shepard is a retired president of Finning and Canfor, a past director for Imperial Oil and current chairman of Concerned Citizens for B.C.
David Black is the chairman of Black Press. Its holdings include The Terrace Standard.