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Newspaper publisher David Black is pictured after announcing plans to potentially build a $13 billion dollar oil refinery in Kitimat, B.C in Vancouver, British Columbia August 17, 2012.

Ben Nelms/Reuters

Newspaper publisher turned wannabe oilman David Black says he's looking for $8-billion in loan guarantees from Ottawa to help cover the costs of his planned $26-billion oil refinery project. Mr. Black argues the undertaking is crucial to the country's economy, and could even help build the energy partnership between Alberta and British Columbia.

So far, Mr. Black said he has only had "conversations" with federal officials and hasn't formally asked Ottawa for any guarantees. But during a speech at Calgary's Petroleum Club on Wednesday, he said his project is critical to Canada's interests, and that British Columbians will never accept an oil sands pipeline across their province without a refinery, and more environmental considerations, at the end of the line.

Scorn will turn to favour, he added, when B.C. residents realize the project will create more permanent jobs than any other project in the province's history, and the products being shipped by tanker to overseas Asian markets will be gasoline and diesel instead of the more worrisome oil sands bitumen.

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"People just do not want [diluted bitumen] to be shipped. Everybody [in B.C.] remembers the Exxon Valdez disaster," he told the Alberta oil and gas industry crowd. "It's just the way the province thinks."

Mr. Black has expanded his Black Press from one community newspaper in 1975 to a company with dozens of titles in B.C., as well as papers in Alberta and the U.S. But he has no experience in building a refinery, and many energy experts have expressed skepticism about his plans in light of the enormous challenges and costs. No new refineries have been built in North America for decades, save for the small $5.7-billion Sturgeon project from North West Upgrading Inc., which is now under construction just outside of Edmonton. And Sturgeon is only proceeding because the Alberta government has agreed to be on the hook for North West Upgrading's outstanding debt should the project flop.

For Mr. Black, the question of how he will get oil sands feedstock from Alberta to the West Coast is still up in the air. The fate of the proposed Northern Gateway pipeline is far from certain, and Mr. Black said he said he will rely on rail, if necessary.

Earlier this year, Mr. Black announced that the Industrial and Commercial Bank of China has agreed – by memorandum of understanding – to become an investor and financial advisor in his Kitimat Clean Ltd. He said he's working to sign another agreement with the China Development Bank. Initially, Mr. Black said, his Chinese investors were willing to put up the total amount. But this past summer, they realized they wanted some Canadian skin in the game.

Mr. Black said it would just make sense for Ottawa to assume a debt obligation of $8-billion because the government has done this before on other projects. For instance, he said, last year the federal government agreed to provide up to $6.4-billion in loan guarantees for the Muskrat Falls hydroelectric project, a $7.7-billion project that would transmit power along an undersea cable from Muskrat Falls in Labrador to Cape Breton.

Mr. Black said his proposed 550,000 barrel-per-day project is imperative to the federal government's stated goals of selling oil products to global markets and capturing the most value from Canada's natural resources. Big oil companies that operate in Alberta today have no impetus to build new refineries in Canada because they want to continue to send discounted Canadian oil to their U.S. refineries, which capture huge profits off of cheap feedstock, he said.

"It is the most critical element in our economic future in Canada today. It's far more critical than a lot of the projects [Ottawa] has supported in the past. They've done it all these other times. Why wouldn't they do it for this?" Mr. Black told reporters following his speech.

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"That would leave the Chinese putting up about 70 per cent of the money."

He also said his refinery could be one of the solutions to any impasse between Alberta and B.C. as the two provinces discuss how B.C. will reap "fiscal and economic benefits," should new oil pipelines be built in Canada's westernmost province. Though the relationship on the energy file between Alberta Premier Alison Redford and B.C.'s Christy Clark was once "frosty," Mr. Black said, he went on to observe that "I don't think there's any issues there anymore, at all."

Mr. Black added that although he had spoken with Alberta Energy Minister Ken Hughes, he hasn't asked the Alberta government for financing for his project. That, he said, is "possible. But I don't see why it should be necessary. The precedents are already there for the federal government to do it."

Mr. Black's big, bold plan for what would be one of the largest refineries in the world calls for a special process that will significantly cut greenhouse gas emissions compared to regular refineries. He has also argued that the shipment of refined goods imposes less risk on the B.C. marine environment in the case of a tanker leak, since products like gasoline and diesel are more likely to evaporate, whereas diluted bitumen from the oil sands is prone to sinking. He said the project will create 3,000 permanent jobs.

He said an upcoming feasibility study for his project will cost $125-$150-million. On Wednesday, he noted talked with First Nations are ongoing.

"We're going to get landlocked oil if we don't [build refineries], either east or west," he said.

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