Kitimat Clean President David Black says the response to his Kitimat-based refinery proposal in Japan and China has been positive, while his critics in the oil sands have been growing more silent.
Black, also Chairman of Black Press, the newspaper chain which owns the Northern Sentinel, spent his Halloween, and the days after, travelling to Tokyo then to Beijing to pitch his refinery plan to about a dozen companies.
Each company he spoke with has asked for more information, he said, while at least one is planning a trip to Canada in December to speak to him further.
“It was all pretty positive. Everybody was interested, everybody wanted more information and not one of them said ‘well, no, we’re not interested.’,” said Black.
In addition he said each company also inquired about their ability to potentially invest in the proposed refinery. Black said there is the opportunity for minority stakes but he would want to keep the company controlled in Canada.
Black said he’s baffled by early critics to the plan who had suggested Asian markets did not want to import refined fuels.
“I never understood that. That’s what [John] Horgan and others said. I never understood where they got that information from,” he said. “There’s a big market in refined fuel. In fact it was the single biggest export from the United States last year. They sold $88 billion in refined fuel.”
While Black has plans to visit other countries, including Korea, he said Japan and China both have strong reasons for getting behind a Kitimat refinery.
In China the reason is fairly straight-forward; they need more oil each year, said Black, and their option is to build their own refineries or get it from Canada. Getting it from us would be cheaper, Black argues, and better for the environment. China’s main source of power for refineries would be burning coal.
“So if they let us build a refinery instead, they don’t have the same pollution issue.”
The situation in Japan is a bit more unique. Black said that they’re actually at over capacity for refinery production, but the changing supply of oil means they have serious investments to make in the future.
“The world is moving to heavier oil. The supplies of light oil have been going down about three per cent a year so more and more refineries are having to put in coking equipment so they can handle heavier oil,” he said. “In Japan’s case, they’re going to have to put a lot of money into their refineries… why not come over here, buy into a new Kitimat refinery, and bring the refined product back to Japan and land it there cheaper than they could produce it?”
He also said Japan’s tight energy infrastructure could be loosened by shutting down some of their existing refineries, shifting their supply from a Kitimat refinery.
“Sure enough there was a lot of interest [for that],” he said.
Interest continued to grow, not just from Asia. He said he had a recent meeting from a North American company interested in the refinery to supply diesel.
Meanwhile he said the plan’s critics have for the most part been coming around.
He noted criticism which said that the oil could just be refined off the Gulf of Mexico in Houston, Texas, but Black countered that a cost analysis showed that incorporating all the extra transport costs meant the product would cost an extra $20 per barrel.
“They’re in the wrong ocean,” he said.
Black plans to stick with Kitimat Clean as chairman for as long as it takes to get the job done properly and to ensure it’s environmentally sensitive, but doesn’t expect he’d be in charge long after the project comes to reality.
“I wouldn’t think my time as chairman would be very long,” he said, pointing out that if it takes eight years he’ll be 74 when it’s done.
But he does feel the time crunch to see the project done.
“I would rather there wasn’t too big a gap in time between when the refinery’s finished and the pipeline’s finished,” he said. “The quicker I can get the refinery on stream the less pressure there will be to start shipping bitumen.”