David Black shows a sample of thick bitumen from the Alberta oil sands. His proposal would keep diluted bitumen from being shipped in bulk from the B.C. coast.

Oil refinery proposed for Kitimat

David Black proposes building an oil refinery to meet Enbridge Pipeline.

VANCOUVER – A proposed $13 billion oil refinery in Kitimat would create more jobs in B.C., but does little to ease the concerns of a Sointula charter boat skipper who testified this month before Enbridge Joint Pipeline Review Panel in Port Hardy.

Victoria businessman David Black, chairman and owner of Black Press, announced Friday he wants to build the oil refinery at Kitimat.

Black told a news conference in Vancouver he is submitting an environmental assessment application to build a “world scale” oil refinery on behalf of Kitimat Clean Ltd., a company owned by Black. The application to the B.C. Environmental Assessment Office is expected this fall.

The proposed refinery would be big enough to process all the diluted bitumen carried by Enbridge’s proposed Northern Gateway pipeline.

“I totally understand the economic benefits of building a refinery on the West Coast,” said Jim MacDougall of Sointula, who voiced his objections to the pipeline in his testimony to the Joint Review Panel. “But at what cost are they doing that? It’s a slippery slope.”

MacDougall wonders how the proposed refinery will be powered, and what kind of environmental damage that will create. He is also concerned that once a pipeline is built to the coast it would open the door to tankers carrying raw bitumen in addition to the refined products.

Black, however, said the proposed refinery would be big enough to process all the diluted bitumen carried by the proposed Northern Gateway pipeline. Black said he has had extensive discussions with Enbridge and other players in the Canadian oil industry, but none has so far offered to back the project.

Black said he will use his own money to finance the proposal through environmental assessment, which he expects to cost several million dollars. After that, he said investors would be needed to complete it, assuming both the refinery and the pipeline receive approval.

No money from Black Press, which owns the North Island Gazette, can or will be used to finance any part of the proposal, Black Press CEO Rick O’Connor said.

Black has had preliminary meetings with Kitimat and Terrace councils, as well as the Haisla and Kitselas First Nations in the region. The proposed site is a 3,000-hectare Crown industrial property between Terrace and Kitimat.

Kitimat Mayor Joanne Monaghan spoke by phone to the news conference, offering encouragement for the proposal. But Black acknowledged he does not yet have formal support from communities or investors.

“I see myself as a catalyst to make this happen,” said Black, who first proposed the idea to the province and the industry seven years ago when he was chairman of the B.C. Progress Board.

Black is working with Glenn McGinnis, a consulting engineer and former manager of the Ioco oil refinery in Port Moody.

“We want it [the Kitimat refinery] to be the cleanest and greenest upgrading and refining site in the world,” McGinnis said.

The refinery would produce 240,000 barrels per day of diesel, 100,000 barrels per day of gasoline and 50,000 barrels per day of kerosene or aviation fuel, refined from heavy oil.

Among those attending the news conference was Art Sterritt, executive director of the Coastal First Nations, a group in the Kitimat area that has strongly opposed the pipeline proposal. Sterritt disputed Black’s assertion that a B.C. refinery “solves half of the problem” with exported oil by shipping refined gasoline, jet fuel and diesel in tankers instead of heavy crude. Those products have their own risks, Sterritt said.

Black pointed out that without marine shipments of those fuels, the remote coastal communities Sterritt represents would not be able to function. The lighter fuel products are still an environmental hazard, but they dissipate much more quickly and do not persist for many years like spilled heavy crude, he said.

NDP energy critic John Horgan was also skeptical.

“At this point, it’s a proposal without business partners and without First Nations and local community support,” Horgan said. “It doesn’t change our position [opposing] the Enbridge Northern Gateway project.”

Black said the refinery will mean nearly 6,000 construction jobs over a five-year period, 3,000 permanent jobs at the refinery and tax revenue for various levels of government.

That’s not good enough for some local residents like MacDougall, who do not want to see the bitumen in B.C. at all.

“They should build the refinery where they’re bringing the stuff out of the ground,” he said. “It’s their product; it’s their mess. They should deal with it.”

with files from J.R. Rardon