Refining here ends Northern gateway objections
By Bruce A Stewart
The Globe and Mail gave BC Premier op-ed space today to lay out her objections to the Northern Gateway pipeline.
There’s a key quote in there we should pay attention to: “heavy oil is unlike any other commodity we transport across Canada”.
Scientifically, that’s arrant nonsense. Ask the folks who’ve had spills in the past few years in Alberta, Wisconsin or Michigan whether they’re happier to have had “normal” oil in their waterways in place of minimally-processed bitumen.
However, it points to the way out of the challenge being raised by BC demanding financial offsets to pay for the “risk” it would assume in “allowing” Alberta’s oil sands product to get to Pacific export markets.
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(Let’s be clear about this: it is British Columbians who will bear the risk of a spill at sea, or a pipeline break on their land. Of course, they’re ready to bear those risks for liquified natural gas, and do with other commodities they export: ever seen the sulphur piles in Port Moody and North Vancouver, for instance?)
The answer is: refine the oil sands product here. Stop thinking of it as a raw commodity to be exported.
Once it’s turned into normal refined products, they’re indistinguishable from any that are produced from lighter oils. Gasoline, diesel, kerosene, benzine, captured natural gas from the process and all the other distillates are all the same. So too are the heavy residues turned into asphalt or plastics of various sorts. So too are the fertilizers and other agricultural offshoots that come from petrochemical refining.
What’s more important is that there’s already a pipeline system in place that can take a lot of this. Kinder Morgan’s Transmountain pipeline to tidewater in Burnaby, BC, for instance, is already there (and has been for fifty years). The existing pipelines east and south can also be used to move product to market.
New pipeline projects — Northern Gateway, Keystone XL, an all-Canadian route east — merely add capacity, or allow older lines to be shut down and retrofitted with some of the safety improvements Enbridge put on the table for Northern Gateway recently once replacements are built.
So … jobs in Canada, an elimination of irrational fears about bitumen in the pipes, ability to get going on exports sooner, what’s not to like? Why aren’t we doing it?
Fear. Frankly, we’re too afraid of standing up to the oil industry and saying “gentlemen, this is going to happen, so make it so”.
Yes, the American majors built heavy oil refineries on the Gulf Coast — that’s because they’re busy refining sludge from the Orinoco (the politicians can yell and scream about Chavez in Venezuela all they like: American gas tanks will be filled with Venezuelan product). Sure, they don’t want to build another one in Canada when they’ve got that investment.
Mind you, we’ve been getting $20/barrel (on average) less for our product than Chavez’s regime gets for his, because ours is backed up in an oil lake at Cushing, OK. Apparently rushing to refine our product isn’t that important.
China’s CNOOC, meanwhile, has an offer on the table for Nexen, that has to be given approval or rejection in our foreign investment review process.
To my eyes, that’s a golden opportunity to say “deal approved if you build…” — and to force the issue.
Once that’s done, we stop with the nonsense of exporting our work to other countries. That’s the hidden price — and every taxpaying citizen knows it — of exporting raw commodities we could be processing.
We can put an end to the “ransom game”, create jobs, and get product direct to market all in one fell swoop. Do we have any politicians willing to show the courage to make it happen?