Pacific Future Energy wants to build a refinery near Prince Rupert, which project backers say is a better export location than Kitimat, where Northern Gateway would pipe in heavy crude.Jonathan Hayward/The Canadian Press
The backers of a bitumen refinery project in northwestern British Columbia believe their made-in-B.C. recipe for getting oil out of landlocked Alberta will win over skeptics.
Other high-profile energy projects – such as Enbridge Inc.'s Northern Gateway pipeline – remain stalled amid widespread opposition in B.C., but officials at Pacific Future Energy say their solution is to build a refinery to address fears about tankers spilling oil into the Pacific Ocean.
While the Northern Gateway proposal calls for loading unrefined heavy oil into tankers for export from Kitimat, Pacific Future Energy is seeking to build an $11.4-billion (U.S.) refinery near Prince Rupert that would turn Alberta bitumen into products such as gasoline and diesel.
Stockwell Day, the former federal international trade minister who is now Pacific Future Energy's senior adviser, argues that Enbridge isn't able to win a social licence for Northern Gateway because the pipeline proposal is tainted by the risk of oil spills from Asia-bound tankers.
Pacific Future Energy is casting Enbridge as an Alberta-centric company that has underestimated British Columbians' opposition to oil tankers.
In a worst-case scenario of a Northern Gateway oil spill in waters off the West Coast, it will be catastrophic to the environment because bitumen will sink and coat the ocean floor, killing marine life and ruining the ecosystem, Mr. Day said in an interview. But if tankers leak refined petroleum products into the ocean, there would be much less harm because gasoline and diesel fuel will float and evaporate, making cleanup much easier, he said.
Mr. Day represented Pacific Future Energy during a trip last week to Asia. In a slide presentation to prospective investors overseas, Mr. Day and Pacific Future Energy chief executive officer Robert Delamar touted the refinery plan while pointing out what they see as Northern Gateway's shortcomings.
They say Prince Rupert offers unobstructed access to the Pacific Ocean's shipping lanes, serving as a better export location than Kitimat, where tankers would need to navigate through Douglas Channel.
Calgary-based Enbridge failed to recognize that Alberta has a "much different culture than B.C.," according to Vancouver-based Pacific Future Energy's slide presentation, which promotes the refinery project's goal of "building our future, protecting our coast."
Northern Gateway faces numerous challenges, notably dealing with environmental and aboriginal groups' fears of oil spills from tankers.
"Enbridge has said that it could have positioned things better from the start," Mr. Day said. He emphasized that securing support from First Nations has been a priority for Pacific Future Energy, whose advisers include two former national chiefs of the Assembly of First Nations – Shawn Atleo and Ovide Mercredi.
Northern Gateway spokesman Ivan Giesbrecht said Enbridge's project is focused on enhancing relationships with First Nations, but it would be inappropriate to comment on the merits of Pacific Future Energy.
"Northern Gateway is impartial to a refinery in B.C.," Mr. Giesbrecht said in a statement. "As a transporter of energy, and not the owner of the resource, we do not make the decisions on what product is transported, or where it is marketed. That decision rests with our shippers."
He said Enbridge remains committed to Northern Gateway, noting that the National Energy Board's joint review panel approved the project in late 2013, subject to 209 conditions.
Pacific Future Energy is considering transporting crude by rail, a possibility because Canadian National Railway Co. has tracks that lead to Prince Rupert. "CN has not had any commercial negotiations with Pacific Future Energy regarding the provision of freight services," CN spokesman Mark Hallman said in a statement.
Once a West Coast refinery is added to the picture, the concept of either crude by rail or a pipeline from Alberta's oil sands to Prince Rupert will gain public support, said Ron Loborec, Canadian energy leader at Deloitte & Touche LLP and a consultant to Pacific Future Energy.
Mr. Loborec took part in the recent trip to Tokyo, Seoul and Beijing. The fledgling refinery project is striving to raise $25-million for engineering and environmental studies.
Brent Jang