Although the Northern Gateway pipeline is seemingly on life support after the Trudeau government imposed a moratorium on crude oil tanker traffic off B.C.’s northern coast, David Black remains confident that his plan for an oil refinery in Kitimat is still very much alive.
The Victoria businessman said Thursday he has not met with officials in the new government, but expects Prime Minister Justin Trudeau to back the Kitimat Clean plan for a $22-billion refinery.
“The Conservatives were hugely supportive and consultants believe the Liberals will be too because this is the right thing to do for Canada,” said Black, who has pushed his project as the first environmentally sensitive refinery ever built.
“The difference between building this in B.C. [versus building a refinery in Asia] is we are spending $5 billion more to do it the right way … it’s never been done before,” Black said.
He is promising new technology for the refinery designed to reduce greenhouse gases. “Compared to building in Asia, this will save 23 million tonnes a year in CO2 emissions,” Black said.
“It’s not as if it won’t get built, the question is do we build it here or there?”
Black, a newspaper magnate who has 170 papers across North America, said his plant would be able to process 550,000 barrels of bitumen into 460,000 barrels of refined fuel each day.
He said he sides with the Liberal moratorium on crude tanker traffic.
“The whole reason I got into this was to stop tankering [heavy oil]. I think it’s awful and there’s no way to clean it up [if there’s a spill],” Black said. “I agree with them on tankers.”
Black has argued refining heavy oil into products such as gasoline and diesel before shipping would reduce potential for an environmental disaster and be an economic boon for B.C.
With Northern Gateway appearing to be in jeopardy with the moratorium on crude tankers, Black is looking at using rail to transport bitumen from northern Alberta to be refined at his plant.
While he still insists modern pipelines are safe, Black believes there is a means of safely transporting bitumen by rail. Canadian National Railway already has infrastructure in place between northern Alberta and Kitimat.
“Heavy oil is a different substance from light oil, which is explosive. If you crack a rail car, it can run out. Heavy oil at room temperature is solid,” Black said.
He noted a new plan would see heated heavy oil poured into specialized rail cars. “We let it set up. When it drops a couple of degrees, it has the consistency of heavy peanut butter and that’s what we would be shipping.”
His argument for that plan is if there was a derailment, the heavy oil would not run out of the cars.
“In Kitimat, we melt it back out of the cars, which will have steam coils in them,” Black said.
Black has secured financing for the project from a Chinese bank, but he said over the last year he’s been convinced the funds could be found in North America. Black added he has been approached by major financial institutions.
Kitimat Clean is preparing environmental applications for joint review by the province and Ottawa. Black said he expects to submit proposals before Christmas.
That process takes about two years and will cost millions, and then there will be six years of building before oil can be shipped to Kitimat.
