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VANCOUVER — David Black is undeterred by skeptics and insists his vision for an export refinery makes sense for British Columbia’s energy market and Alberta’s oil sands.
For the past two years, the B.C. newspaper publisher has been investing his own money to get the ball rolling on Kitimat Clean Ltd., an ambitious project that aims to turn bitumen from the oil sands into refined products, such as gasoline, for shipping in tankers to Asian energy buyers.
“There is money to be made, but I got into this because I want to reduce the environmental risk,” the founder and chairman of Black Press Group Ltd. said in an interview from Victoria. The risk that he is referring to is the fear of a massive oil spill from tankers off the West Coast, a concern that is shared by First Nations in British Columbia.
If a tanker hauling gasoline were to leak in the waters near Kitimat, B.C., it will be easier to contain and clean the spill because the fuel won’t sink to the bottom of the ocean like bitumen would, Mr. Black argues.
His venture carries a hefty $32-billion price tag – $21-billion for the refinery in Kitimat, $8-billion for the pipeline and $3-billion on other infrastructure and a tanker fleet.
Critics, however, say Kitimat Clean and a rival plan by Pacific Future Energy face long odds of ever becoming reality.
“The refined products market is very competitive,” said Judith Dwarkin, chief energy economist at ITG Investment Research. “Refined products are more expensive to ship than crude.”
“Refineries are being expanded in Asia and the Middle East, and these B.C. refineries would have to compete in competitive markets like Singapore and China,” Ms. Dwarkin said.
While some energy industry observers have described him as a dreamer, Mr. Black prefers to think of himself as the catalyst for Kitimat Clean. His goal is to launch operations as early as 2020. If investors ever surface, he would turn over the reins to a consortium of oil giants. But oil companies have steered clear of Kitimat Clean, forcing him to make his own case to build a West Coast plant.
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