Our country must focus on three vital things: develop more good jobs, because many are disappearing; build new businesses that can be taxed, rather than increase the burden on existing taxpayers; and improve our physical environment while we do this.
One obvious way to achieve this is to encourage “value-add” in the oil industry. Instead of exporting our crude oil to other countries, let’s process it here. Refineries can be built along B.C.’s coast employing large numbers of workers in good-paying jobs for decades and generating massive new taxes for our governments. (It is uneconomic to build export refineries in Alberta, which is why there are none there. All export refineries in the world are built on the ocean.)
Up to 85 per cent of a refinery’s annual operating cost is the price of the crude oil and the natural gas that it requires. Because Canada has large inexpensive reserves of these two resources consultants say that an export refinery near to the oil fields would be the lowest cost refinery on the entire Pacific Ocean. If we build it we can provide a substantial market for B.C. natural gas and help Alberta and Saskatchewan make 20 per cent more from their bitumen than if it is exported.
By keeping the refineries in our backyard we can also opt to decrease their CO2 emissions. Shipping diluted bitumen (dilbit) to any other country would result in far more global warming. A proposed refinery at Kitimat for example was going to save 23 million tons of CO2 emissions per year when compared to every other bitumen refinery in the world. That is equivalent to taking six million Canadian cars off the road forever. Some people were concerned about the proposal because they worried about increased emissions from within Canada. Should that be our concern or should we be working to reduce CO2 emissions globally?
Coastal refineries would also protect our ocean from dilbit. Dilbit differs from the conventional oil in Alaska-to-Washington tankers, which floats if spilled. There is only one published study that shows what would happen if there were a spill of dilbit in B.C.’s coastal waters. The study was thorough and overseen by Environment Canada, Fisheries Canada and Natural Resources Canada. It proves that because of all the grit in the ocean from B.C.’s glacial rivers, most of a dilbit spill falls to the bottom within three hours. There is no way to prevent that and no way to retrieve the dilbit so the ocean and fishery would be ruined for generations.
We are imposing carbon taxes on our oil industry. That made sense years ago when neighbouring countries were also promising to tax carbon emissions. However, it does not now because they did not. As a result companies worried about taxes are simply moving south of the border. Many, like Royal Dutch Shell, France’s Total, American ConocoPhillips, Norway’s Statoil, American Marathon Oil, and American Koch Industries have recently pulled out of Canada and increased production elsewhere. Carbon taxes are crippling our economy while accomplishing nothing to reduce global warming.
There is a better approach to reduce CO2 emissions in the oil fields. Governments should push for, and help support, pilot plants to test the use of cold solvent catalysts instead of hot steam and water, to melt the bitumen out of the sand formations. Most field emissions would then disappear.
One last point. Refineries are the source of most chemicals used by mankind. For that reason huge and fundamental industries locate near refineries to use the chemicals in manufacturing, scientific research and medical research. If we build large refineries we can capitalize on these associated opportunities too.
So, here are some common sense ideas to achieve the three vital needs:
Instead of punishing our oil companies with carbon taxes, and actually hurting our economy, let’s help them switch from using steam in the oilfields to cold solvent catalysts. Then let’s increase Alberta and Saskatchewan production in order to build more jobs, increase government tax revenues, and reduce CO2 emissions in other countries where emissions are high.
Instead of encouraging the oil industry to export our raw resources, let’s process them here and create several thousand new jobs in the refining and chemical industries, especially in B.C.’s northwest where they are badly needed, as well as more new taxes for governments.
Instead of shipping dilbit by pipeline to the coast, let’s transport dry inert bitumen by train. This will be less expensive because the rail lines across B.C. are in place and the distance is short. If and when a derailment occurs, backhoes can pick up the bitumen.
Instead of putting dilbit in tankers, let’s ship refined fuels that float and evaporate if spilled.
Instead of shipping dilbit to other countries, let’s build the greenest refineries on the planet in B.C., cutting the world’s CO2 emissions and producing the cleanest fuels on the globe. We would become a world leader in environmental refining, and other countries would follow.
Let’s use our common sense to improve things in Canada and the world. The added benefits would be economic growth, increased government tax revenues and a greener planet.
David Black is chairman of Black Press Ltd. and founder of Kitimat Clean.