David Black’s recent $25 billion oil refinery surprise party raised many eyebrows in fossil fuel and media circles – likely more than were originally raised last August when the West Coast newspaper mogul initially told the world he planned to build a refinery near Kitimat on B.C.’s north coast.
Was this guy losing his grip on reality or what? I mean, what does a local newspaper baron know about the global energy sector and why would he want to get into that business anyway?
Kitimat Clean Ltd.’s March 6 coming out party answered many of those questions.
It also made clear that business out west is still capable of pioneering solutions to tough challenges that don’t involve shutting down opportunities to exploit B.C.’s resource and energy riches for the benefit of current and future generations.
It might be unpalatable for environmental evanglists, but B.C. and the rest of the world still need fossil fuel’s concentrated energy equation to drive the economy.
The impact of carbon footprints, carbon taxes, carbon offsets, cap and trades, carbon sequestration and all manner of the new climate control industry remains untested and largely uncontested in the court of public opinion.
For pragmatic entrepreneurs like Black, realities of world energy needs and marketplace opportunities are in the here and now.
The green brigade might not want to believe it, but matters of environment are also uppermost in the minds of business.
Black is a prime example.
Aside from buying, selling and publishing newspapers, he’s an avid sailor.
Sailors, fishermen and others who ply B.C.’s coast appreciate what a spectacular piece of the world’s scenic inventory it is.
A tanker spill of oilsands bitumen tar would seriously mar that beauty; a spill of gasoline or other refined crude oil product would be far less so. Thus Black’s audacious refinery initiative.
But more than fellow newspapering types were skeptical of its viability.
In the heart of the Canadian oil patch back in Calgary, that initiative and Black’s pitch for its financial backing were met with indifference. Big Oil was not much interested in sinking billions into a refinery where the return on investment might be a mere 10% at best.
But for Black, 10% of multi-millions in potential offshore sales is nothing to sneeze at.
Also, as he advised oil patch oligarchs, the oilsands bitumen pipeline and tanker shipping combination is pretty much a non-starter for British Columbians. Still not impressed after a pair of analytical reports backed the refinery’s fiscal viability, one oil patch executive challenged Black to go away and do it himself if he believed so strongly in the enterprise. Thus last week’s surprise party.
And now the possibility that B.C. could become an exporter of refined crude oil products into a market that’s not marked down to service U.S. consumption alone, spin off thousands of jobs and billions in tax revenue in the process and help mitigate the environmental impact of oilsands development on one the world’s most majestic coastlines.
That’s a pretty good package from a newsprint man.
Of course, Black has yet to reveal who’s committed to buying what from his refinery in a world where many similar facilities are operating at less than capacity. He also hasn’t connected the dots on how it will be supplied with crude oil considering that building a pipeline of any kind remains extremely contentious in B.C. But word that investors are already lined up to finance the project appears to back Black’s claims that purchase commitments won’t be an issue. His refinery, meanwhile, could be supplied with oilsands bitumen via rail. The proposed site for it is only 15 miles from a CN mainline and on one of the railway’s spur lines.
If he’s successful in building a B.C. rarity – a major oil refinery whose products are more competitively priced than their Asian or other counterparts – Black will warrant more than a round of applause from his peers. He’ll become a member of that rapidly shrinking cadre of entrepreneurs who dare to think big in a small-minded world where the only thing that keeps getting bigger is government. •
