Black touts ‘safer’ oil-by-rail plan for B.C. refinery

'Dead' Northern Gateway pipeline prompts plan B to move bitumen using trains

Victoria businessman David Black spoke to Rotarians in South Surrey Nov. 18 about his proposal for an oil refinery in northwestern B.C.

B.C. oil refinery proponent David Black says his $22-billion proposal won’t die with the apparently thwarted Northern Gateway pipeline – he aims to bring oil sands bitumen across northern B.C. by train instead.

The Victoria businessman, who is majority owner of Black Press and this newspaper, spoke Wednesday at a Rotary Club meeting in South Surrey.

Black’s Kitimat Clean proposal calls for a refinery between Terrace and Kitimat that would process bitumen into gasoline, diesel and other refined fuels for Asian markets.

He said the federal Liberal government’s move to formally ban crude oil tankers from B.C.’s north coast means the Northern Gateway pipeline plan is “pretty much dead” but that shouldn’t block tanker exports of refined fuel, which would be less damaging than a spill of crude or bitumen at sea.

Black said his plan to carry oil by rail will be far safer than the crude oil trains that have been vulnerable to fiery disasters elsewhere.

He said he’s in talks with CN Rail to load rail cars with undiluted bitumen, which would be much thicker – virtually solid – compared to the diluted bitumen that moves through pipelines or the light oil that’s often carried by train.

The bitumen would be heated at the beginning and end of each rail trip to make it flow for loading and unloading from tanker cars. Black argues it would be unlikely to leak or burn if a train derailed.

“It’s safer and way easier,” he said, estimating six trains a day would run every four hours.

Black continues to pursue environmental approvals, and believes that with green lights from regulators and first nations, oil shippers and financiers will come on board.

But his is not the only such proposal.

Pacific Future Energy, led by a Mexican conglomerate, initially tried to buy Black out and has since proposed a similar refinery with the same technology. Its backers include SNC Lavalin and prominent aboriginal advisors.

Pacific Future initially proposed a site in Prince Rupert but Black said that firm is trying to strike a deal with the Kitselas band for the same site Kitimat Clean had chosen.

There are other potential sites with different first nations, he said, but they’re less suitable.

Black also criticized the provincial government’s focus on liquefied natural gas projects.

He said his refinery would generate more permanent jobs and taxes for governments than even an optimistic number of LNG plants.

“Government really dove at this,” he said, adding the province “rolled over” in guaranteeing generous tax treatment to get the industry on board, leaving little future revenue to government.

Too many LNG plants are already being built in Australia and the U.S., he said, while Japan’s shift back towards nuclear power will cut demand.

“I just don’t think there’s much chance,” Black said. “The LNG dream is now fading.”

Black is not concerned that low oil prices will also doom his refinery dream.

He said he believes low prices as well as the U.S. rejection of the Keystone XL pipeline to the U.S. Gulf Coast will make his option for reaching lucrative Pacific markets increasingly attractive to oil firms grappling with narrowing margins, particularly in Alberta’s oil sands.

Black maintains a refinery can’t be built in Alberta itself because of opposition from multinational oil firms that own Texas refineries, and because the large prefabricated modules that can be assembled on the B.C. coast can’t be hauled inland.

His proposal would use an unusual technology – adding $5 billion to the costs – that slashes the carbon emissions to less than one third of a conventional refinery.

Black argues the “greenest refinery in the world” would largely offset the higher emissions of oil sands bitumen and forge a political solution for Canada’s energy policy makers.

“It cleans the whole industry up,” Black said. “We’re not in the dirty oil business any more. We get huge value add. And it takes away the issue of a heavy oil spill at sea.”

Just Posted

Bulkley Valley tourist industry adjusts to salmon closure

Businesses maintain philosophy of cooperation and enthusiasm as tourists begin arriving in Smithers.

Northwest family doctors win awards for B.C. launch of CHANGE Program

Northwest family doctors win awards for B.C. launch of CHANGE Program

Employer health tax may strain local governments

RDBN on the hook for an extra $24,000 by 2020

UPDATED: Horgan says B.C. defending its interests in Trans Mountain pipeline

Canadian finance minister’s update comes the same day Kinder Morgan shareholders plan to meet

Houston working around the clock to address flooding

River Forecast Centre upgrades advisory for Houston

VIDEO: Canadian Forces help flood-ravaged Grand Forks residents heal

Sgt. Bradley Lowes says the military is used to dealing with traumatic times

Chilliwack Chiefs make history with first RBC Cup win

In front of a huge and noisy crowd, the Chiefs claimed their first-ever national junior A title.

UPDATED: Majority of flood evacuees in Kootenay-Boundary allowed to return home

Officials hope to have all 3,000 people back in their homes by Monday night

B.C. Lions bring back 6-time all-star offensive lineman Jovan Olafioye

He was acquired by the Montreal Alouettes last year.

Whitecaps rally for 2-2 draw with FC Dallas

Vancouver climbed out of a two-nil hole to tie FC Dallas 2-2

B.C. VIEWS: Making sense of climate policy

Flood and fire predictions have poor track record so far

Chilliwack Chiefs moving on to RBC Cup final after thrilling win over Ottawa

Kaden Pickering scored the winning goal in the 3rd period as Chilliwack won their semi-final 3-2.

VIDEO: As floodwaters recede, crews assess the damage to Grand Forks’ downtown

More than four dozen firefighters and building inspectors came out to help

Wellington Dukes pull off epic upset of Wenatchee at RBC Cup

The Dukes are off to the championship game after downing the Wild 2-1 Saturday at Prospera Centre.

Most Read