Companies & Industries

A new player in B.C.’s energy industry promises “the greenest oil refinery ever built”

Homegrown west-coast energy investors emerging as oilpatch heavyweights get bogged down

oil refinery

Pacific Future Energy says it will establiash “the greenest refinery ever built.” (Darrell Nash)

From the time Enbridge began talking publicly about Northern Gateway almost a decade ago, the oil pipeline project—which is expected to get federal cabinet approval any day now—got off on the wrong foot by the company’s lack of a presence in British Columbia. The Calgary-based company has since corrected that, setting up offices in B.C. and appointing B.C. native Janet Holder as the frontwoman for the project. But the disconnect between the proponent and the people on the ground remains.

The building liquefied natural gas boom faces some of the same problems. The proponents mostly might as well be from Mars. Canadian, let alone B.C.-based, companies had virtually no skin in the game until recently. For all that Premier Christy Clark has tried to kick-start the industry, we’re still hurry-up-and-waiting for foreign investors to make up their minds whether to put shovels in the ground.

It’s taken a while, but the homegrown investors are finally coming out of the woodwork as the oilpatch heavyweights get bogged down. It started small, with the Haisla Nation taking an equity position in the Douglas Channel LNG project. That was followed in 2012 by Victoria newspaper publisher David Black’s much more ambitious but somewhat speculative Kitimat Clean project, consisting of a $25-billion oil refinery in the northern town that would create jobs and taxes in B.C. while ensuring that the exports were of finished products rather than the diluted bitumen from the oilsands whose behavior in the case of a marine spill is virtually unknown.

READ: Six factors that could still stop the Northern Gateway pipeline

This year has seen a spate of homegrown proposals, including Eagle Spirit Energy, a partnership between First Nations and Vancouver’s Aquilini family which would build a crude oil (as opposed to bitumen) pipeline to Prince Rupert from Alberta, and Vancouver-based Steelhead LNG.

The latest addition to this list is Pacific Future Energy, which on Tuesday announced a $10-billion oil refinery to be built on B.C.’s north coast. “This will be the greenest refinery ever built,” says company chairman Samer Salameh, whose background is primarily in building telecommunications infrastructure in the U.S. and South America. With an ultimate feedstock capacity of one million barrels a day and “near net zero” emissions, the refinery would produce high-margin products such as kerosene and aviation fuel for the Asian market. Salameh says Pacific Future has a project office staffed up and a preliminary design from an Italian engineering firm, and has initiated discussions with the B.C. and federal governments, first nations and Asian customers.

Still, the project appears to be premised on a ban on shipping unprocessed bitumen off the B.C. coast, the basis of Northern Gateway’s business model. “Why would B.C. ever want to do that? It creates no value for B.C., no jobs for B.C., no income for B.C. and the whole risk is taken by everybody living in B.C. It doesn’t make sense to me,” Salameh says. “You cannot clean up dilbit (diluted bitumen). There is simply no technology to clean it up.”

He insists the refinery could still compete were there no such bitumen tanker ban in place, but that “we think there should be a ban on tanker traffic because it’s the right thing to do.”

As with all the B.C.-based projects, Pacific Future’s financial wherewithal and energy industry experience sounds a little thin. But these local proponents are at least talking in terms the residents of B.C.—who, whatever the federal government may decide, have certain legal rights and physical occupancy on their side—might actually accept. Perhaps the next step in the development of Canadian energy export capacity to the only market that is growing, in Asia, is for the proponents on either side of the Rockies to start talking together in the same language and pooling their resources. As Salameh puts it, “The advantage of coming in later than everybody else is to learn from their mistakes.”