By Paul Morden, from www.theobserver.ca The Observer
Canada’s economy is giving away $2.5 billion a year by not building another refinery in Chemical Valley to upgrade oil sands bitumen, say those promoting the project.
The case for a $10-billion, 150,000-barrel-a-day refinery in Sarnia-Lambton to upgrade more bitumen from the western oil sands was repeated this week in a special energy supplement in the Globe and Mail.
Members of the Sarnia-based Bowman Centre have been arguing Canada should benefit from wealth and jobs that could be created by processing more oil sands bitumen at home, instead of exporting it to refineries on the U.S. Gulf Coast and elsewhere.
Don Wood, an associate of the Bowman Centre and former Polysar vice-president, argues a new refinery in Sarnia-Lambton could pay for itself in three years, and allow Canada to capture $2.5 billion a year in wealth and jobs now going elsewhere.
“We’ve been pretty active,” Wood said about the work he and others at the centre have been doing, along with the Sarnia-Lambton Economic Partnership.
As part of the effort, Wood has travelled to Alberta to speak at conferences and meet with oil industry representatives.
“Alberta has an overhang of bitumen and they’re developing production capacity faster than they’re developing the ability to take it away to market,” Wood said.
At the same time, Ontario needs more jobs.
“There’s a commonality of interest,” he said.
Wood said he’s encouraged some oil sands companies, particularly those using thermal processes to recover the oil, have shown interest in exploring the idea of a new Canadian upgrading refinery “as a strategic option.”
Wood said delays in the U.S. approval for the Keystone pipeline have oil companies looking at other ways of getting bitumen to refineries on the Gulf Coast, but those additional transportation costs lower the price they’re receiving.
That’s a good deal for Gulf Coast refiners who can buy the bitumen cheaper and make more money upgrading and processing it, but the Bowman Centre argues Canadians should receive more of the benefits from adding value to their own natural resource.
And Sarnia, home to existing refineries and chemical plants, is already connected to western Canada by pipelines, plus it has the workforce, infrastructure and community support needed for the project, Wood said.
“While other locations have indefinite time lines that are influenced heavily by a whole host of political and social issues, ours is faster and much less uncertain,” he said.
The idea is getting attention, according to Wood.
“What we need to do,” he added, “is focus more resources on the business development activity.”
The Bowman Centre is named for Clem Bowman, a former head of Imperial Oil’s research department in Sarnia who went on to play an important role in the developing of Alberta’s oil sands.
Last year, the centre organized a conference that drew oil industry representatives to Sarnia-Lambton to talk about the possibility of a new refinery.
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