David Black is convinced his proposed refinery near Kitimat will be both an economic and environmental winner, but challenges remain about getting bitumen from Alberta to the north coast.
Black sat down with The Citizen on Thursday during a visit to Prince George to discuss the progress he's made and what lies ahead for the $25 billion plan to ship oilsands products to the coast, likely by pipeline, to Kitimat to be refined and exported to Asian markets. The newspaper mogul said a lot of progress has been made, from signing a memorandum of understanding with a major Chinese bank to meeting with B.C. First Nations leaders to gauge their support for the idea.
Black plans to submit paperwork to begin the environmental assessment process for the refinery this fall, but he said there's still more work to do on his pipeline plan.
"It's a diluted bitumen pipeline and people are worried about that, especially after the Kalamazoo incident," he said.
The 2010 spill on an Enbridge-owned pipeline near the Kalamzoo River caused significant environmental damage in Michigan and hurt the cause of the pipeline industry in North America. Black said he believes modern pipelines can be built and operated safely, but he wants to do more research.
During meetings over the past few months with First Nations leaders between Prince George and Kitimat, he's proposed forming a joint company with Aboriginal groups to build the pipeline to feed the refinery.
"Let's form a partnership on a pipeline company, let's get in on the ground floor together, research this thing together and find out if it's going to be safe," he said of his pitch to First Nations groups.
"If it's not going to safe let's all back off in a hurry, but if it is, let's build the safest pipeline in the world and get on with it."
Black said the reception has been positive and most chiefs have been open to continuing dialogue.
"We're not getting nos from anybody, we're not getting hard nos," he said. "There are a lot of people leery, worried and who want more information, but I not one chief has said, 'look, don't ever call me again, go away.' They've all said, 'I want more information.' "
If a pipeline isn't a viable plan, Black would entertain the idea of shipping oil by rail to the refinery. However he has concerns about the safety aspects of having 12 extra trains a day carrying hazardous material crossing northern B.C. as well as the disruption it would cause at all the level crossings in the region.
Gaining access to Asian market has long been a goal for Canadian oil producers, but has become more urgent in recent years as the United States has ramped up its domestic production and is no longer as dependent on Canadian supply.
Black calls the situation "an emergency for Canada" but believes his plan will help because it will not only open new markets to Canadian resources, but it will thousands of jobs and will use a revolutionary new refining method which will cut carbon dioxide emissions in half.
By using a recently patented modification to the Fischer-Tropsch process, Black's refinery would add hydrogen by taking it out of natural gas, rather than remove carbon as has been traditionally done. Not only with this allow more hydrocarbons available for sale, the process would also reduce emissions and generate power and water which could be used to make the refinery function.
He said the carbon dioxide savings from the refinery would almost offset the extra energy required to take oilsands products out of the ground, making the life cycle carbon footprint of Canadian oil comparable to oil from other parts of the world.
"We're pretty excited about that, we'd be the first in world and it's new Canadian technology," he said. "If we can be the guinea pig and make it work then I expect all heavy oil refineries in the world would be built that way and it's just better for the planet."
At its peak the project would create an estimated 6,000 construction jobs and the refinery would require 3,000 permanent employees to operate. Black believes just as many related jobs could be created by associated petrochemical industries that could spring up around the refinery.
Black expects the environmental assessment process to take at least three years to complete and it would take another five years to built the refinery and pipeline.
In order for Black's idea to come to fruition he would need to gain regulatory approval for all the components to his plan, get governments to sign off on them and obtain the social license from people in the region.
Black said he's started that latter process by holding meetings with First Nations leaders and will hold town hall events for communities across northern B.C. as the project gets closer to becoming a reality. He doesn't think the project will be a tough sell, if people can be convinced a pipeline can be built and operated safely.
"Two thirds of British Columbians are in favour of a safe pipeline if there's a refinery attached," he said. "Because it takes away the threat at sea, it creates a lot of jobs and investment and quality of life for B.C."
Convincing people of that could be a challenge due to the strong environmental push back to the proposed Northern Gateway pipeline which seeks to traverse a similar route.
"The truth is the environmentalists are out there in the field a lot more than the pipeline proponents," he said. They're saying this is going to destroy your world, it's going to destroy all your water guaranteed and they will leak guaranteed and on and on and on - none of that is true."
Black cited the safety record of the Kinder Morgan oil pipeline which already crosses B.C. and believes modern pipelines can be even safer, given improved material, coatings and construction techniques.
"The truth is, I've talked to a lot of pipelining folks and they all claim that modern pipelines built in North America - big ones, done to spec, like this one would be - do not leak," he said.