David Black has sparked a new conversation about nation building by proposing that a refinery be built in Kitimat, B.C., to process Alberta oil.
What he suggests would turn Alberta’s oil into a shared resource in a fashion never before considered, and spread the wealth in a manner that would bring new stability to Alberta and B.C.
The newspaper mogul (who owns the Red Deer Advocate) has also challenged Alberta in a way that should make us question our economic priorities in the short term, and our vision of this province over the long haul. Why, we should ask, would we allow a refinery to be built to process our oilsands bitumen in B.C. when we could add value, and create durable jobs for skilled workers, here?
In many ways, it’s a matter of perspective: does the national good supersede that of one province?
Black’s proposal will sharpen the focus in British Columbia in the next nine months, as our neighbours to the west head toward a provincial election.
Surely he has given B.C. Premier Christy Clark the economic leverage she needs to make the Northern Gateway pipeline palatable for British Columbians.
Black’s proposed $13-billion refinery would create 6,000 construction jobs and 3,000 production jobs (plus all the economic activity that will ripple from such a project). Those kinds of numbers would mean Clark doesn’t have to negotiate with Alberta Premier Alison Redford for a piece of Alberta’s oil revenue pie (which she was unlikely to get anyway). Never mind the tax revenue that such a significant project will create over time.
And Black has placed a new measure of urgency upon the federal government as it shepherds two critical pipeline projects through various regulatory and political mazes.
Suddenly, B.C. has an economic and environmental stake in the pipeline proposal.
And suddenly, some of the environmental concerns about offshore oil spills diminish (refined products tend to be less messy to clean up).
But at the heart of the conversation, as we ramp up for another boom cycle, Albertans should be wondering where the markets will be for our oil and gas.
For as visionary as Black’s proposal seems to be — and he is simply saying he would bankroll the proposal through the environmental assessment process, then look for investors — it would be a much better fit in Alberta.
A new report from BMO Capital Markets Economics says that oil production will continue to drive job creation in Alberta through the next four years, in total resulting in 120,000 new jobs in this province. Alberta’s economy is projected to grow by 3.2 per cent this year (as compared to a national average of two per cent growth).
That’s big news. But it should come with a caveat:
Without either the Keystone XL pipeline project to Texas, or the Northern Gateway project to Kitimat (and, ultimately, China), Alberta’s surge seems less assured. Building both would be optimum, because it would force our American clients to pay fair market value for our resources.
So, while we await American approval for the Keystone XL pipeline to service Texas refineries and for the National Energy Board’s review of the Northern Gateway proposal, Albertans should be wondering if we have put the cart before the horse.
If we expanded our refinery capacity in this province, and delivered finished product to either the U.S. or Asia — or both — wouldn’t we have built a better, more stable, economic foundation?
The industry masters argue that refinery capacity already exists in Texas and Asia and similar investment in Alberta would be superfluous.
But Black understands that adding value to product at home, before export, puts us in a better position to control our resources.
It’s a perspective long overdue in Canada — and particularly in Alberta.
John Stewart is the Advocate’s managing editor.