As we approach the May 2017 provincial election, I expect Liberals to return the Kitimat bitumen refinery to the fore. The proposed business may not be environmentally desirable or economically viable but, once more, it can serve a political purpose.
The following was first published in March 2013:
On March 7, BC Liberal Premier Clark spoke in the legislature about an industrial project mooted for Kitimat:
Yesterday, Mr. [David] Black announced that he had found investors willing to back his bid to invest $25 billion in his project. He proposes to build a $16 billion refinery, $8 billion in pipelines and a further $1 billion in new tankers to carry the refined petroleum products to customers in Asia.
This is a credible proposal from a credible B.C. businessman.
And without question, this would be the largest single private sector investment in the history of our great province. And it would be, potentially, a tremendous game-changer for our children and their children…
Talk of Mr. Black’s incredible enterprise reminds me of a business proposal promoted by another superlative wielding politician. October 1957, then Premier W.A.C. Bennett called a news conference and, with unstoppable enthusiasm, demanded his message not be undervalued:
This is the most momentous announcement I have ever made. …the most important that B.C. has experienced in its whole history…
Premier Bennett was excited by the project anticipated when his government signed a memorandum of intent with Swedish promoter Axel Wenner-Gren. Bennett’s government offered development rights to 40,000 square miles of the province. Centrepiece of the Wenner-Gren plan was a 200 mph elevated monorail system from southeast BC to the Yukon. It was claimed to be virtually maintenance-free and untroubled by grades. Other promises included forestry projects, mines, dams and hydroelectricity developments.
The grand concept was fantastical but it excited only dreamers, not realists.
There had been other momentous proclamations involving Wenner-Gren. Allegedly an arms-dealing war-profiteer and friend of Nazi leaders, the Swede had been party to other considerable but failed proposals, including a plan to amalgamate four Nordic countries, development of southern Rhodesia and an improbable New York transit plan.
British Columbians were mostly skeptical about the initiatives. Opposition MLAs were opposed and one observer claimed that Wenner-Gren made his money from investors drawn into schemes after carefully orchestrated publicity campaigns. Premier Bennett, who always had eyes on the next election, may have been enthusiastic for Wenner-Gren’s projects or he may have used them as convenient levers in political wars.
Socred cabinet ministers in the fifties sounded much like the Minister of Graft and Corruption sounds in current times. He complains the opposition has no interest in wondrous economic benefits guaranteed by David Black’s Kitimat bitumen refinery.
There are other indicators that partisan politics are the primary motivators behind Kitimat Clean Ltd. The Globe and Mail reports “Enbridge is not backing the proposed refinery nor are any energy companies.” Despite the years long design and approval processes that lie ahead, uncertainty involving input supplies and final markets and the need to gain First Nations support, David Black says the fate of his refinery will be determined within 60 days.
Perhaps a May election will enable that determination.
In Kitimat Refinery Project Demands Transparency, The Tyee published Peter Ewart’s devastating examination of the Kitimat proposal. Supposedly, Oppenheimer Investments Group has arranged the funding David Black needs.
To most, that claim sounds impressive. The Oppenheimer name has been famous, sometimes infamous, for generations. One Oppenheimer family accumulated billions as controlling shareholders of De Beers, long the dominant force of the international diamond industry.
Except, the diamond entrepreneurs have no connection to this story and, as Ewart notes, “Oppenheimer Investments Group has no affiliation whatsoever with the investment bank Oppenheimer & Co, which is headquartered in New York.” OIG claims offices around the globe but the only addresses published are email addresses.
Let’s say the certainty of $25 billion in financing for Kitimat Clean is unproven.
However, as with the Wenner-Gren proposals of the fifties, David Black’s project will have served a purpose if it provides a convenient boost to the government’s fortunes. And, BC Liberals are much involved in Kitimat Clean.
Days after Premier Clark’s announcement in the legislature, her government released a report from oil industry consultants Navigant, claiming “that building a refinery on the coast of British Columbia has economic merit and should be seriously considered by the government of British Columbia.”
However, the depth of analysis leading to this conclusion is suspect. On page two of the report is a notice to readers:
This report …was prepared for the Government of British Columbia… on terms specifically limiting the liability of Navigant Consulting…
Navigant’s conclusions are …based in part upon materials provided by the Client and others, and these materials have not been independently verified for accuracy or validity. Therefore, Navigant does not make any representations or warranties of any kind with respect to the accuracy or completeness of the information contained in this report…
Facts not independently verified?
In other words, the consultant’s report has little probative value, shaped as it is by the Liberal government for partisan purposes. Of course, the Chambers of Commerce, the Vancouver Sun and other fellow travellers are applauding uncritically but, given the Liberal record of deceit, we surmise that the entire Kitimat Clean project may ride Axel Wenner-Gren’s monorail to oblivion.
By the way, Canada’s last coastal refinery was the one built decades ago by John Shaheen in Come By Chance, Newfoundland. The province’s heritage website gives this account of a project with less than one fifth of the capacity intended in Kitimat:
During the mid-1960s, American entrepreneur John Shaheen, owner of Shaheen Natural Resources Company and various other petrochemical businesses, arranged with Newfoundland and Labrador Premier Joseph Smallwood to construct an oil refinery at Come By Chance, then a small hamlet on Newfoundland’s east coast. The plan, however, was ill-fated and in 1976 caused one of the single largest bankruptcies in Canadian history to that date. It also greatly added to Newfoundland and Labrador’s mounting public debt.