A look at the refinery proposal

David Black’s proposal to build an oil refinery in the Kitimat Valley is one that has clearly gotten people across western Canada talking.

David Black’s proposal to build an oil refinery in the Kitimat Valley is an interesting one, and one that has clearly gotten people across western Canada talking.

It’s far from a perfect proposal – there’s no backers, no money for construction, no agreements in place for the use of the oil from the Enbridge Northern Gateway pipeline and no agreements or expressed interest from Asian companies to purchase the refined product. One could say it’s more of an idea at this point than a project, though it will be interesting to see how everything plays out in the years ahead.

But there are a number of important things that Friday’s announcement did and did well.

The first is addressing concerns from environmental groups, First Nations and residents in relation to raw oil being transported up and down the north coast. While there is still concern about the pipeline that would lead to the refinery, the marine shipping and possible spills of crude oil would be off the table should the refinery move ahead.

Secondly, it provided a glimmer of value to BC that was otherwise missing from Enbridge’s pipeline proposal. A few jobs and some royalties from the land the pipeline is built on is nowhere near enough of an economic incentive for BC to want the pipeline; 6,000 temporary and 3,000 permanent jobs as part of a $13-billion development sweetens the pot quite a bit.

The third, and perhaps more important thing, that Friday’s announcement did was to get people really thinking about the way Canada and BC handle our raw resources. What Black was essentially saying is, “Why ship out raw resources to be processed overseas when we can process them here in BC and here in Canada and ship out a finished product?”.

To me that’s the (pardon the pun) $13-billion question. The number of jobs and economic impact created in the province through shipping raw oil or raw logs – which is currently done from the Prince Rupert harbour – pale in comparison to the jobs and money that would be seen by processing the resources here.

As I’ve said, I don’t see this pipeline happening. But it’s good to see this announcement spurring on the discussion about raw resource exports in Canada.