B.C. premier comes close to endorsing $25 billion oil refinery plan

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British Columbia Premier Christy Clark speaks in Vancouver on January 22, 2013. THE CANADIAN PRESS/Darryl Dyck

VICTORIA - Premier Christy Clark has come close to offering her government's endorsement of a proposed $25-billion oil refinery development at Kitimat in northwest British Columbia.

Clark told the B.C. legislature Thursday the oil refinery proposal being put together by media mogul David Black nearly meets the province's five conditions for allowing heavy oil initiatives in the province.

"Our government wants to use every tool at our disposal to move the proposal forward where it can be judged on its merits by a robust, rigorous, and most importantly, independent environmental process from political influence," she said.

Clark didn't mention by name the Enbridge (TSX:ENB) Inc., Northern Gateway proposal to build a pipeline from northern Alberta to Kitimat to export Alberta oil to Asia on board supertankers.

She compared the Black proposal to her government's support of liquefied natural gas exports.

"Our government takes the view that we should work together to address legitimate environmental and safety concerns and find a way to get to 'Yes,' on projects that will grow our economy," she said.

Clark noted Black's proposal calls for 6,000 construction jobs and 3,000 full-time jobs once the project is complete. She said refining oil in B.C. keeps more money in the province and with Black driving the development, ensures the project is B.C.-owned.

Clark said the project would be the largest private sector investment in the province's history.

Black said Wednesday in Vancouver the Kitimat Clean Ltd. project would include an oil refinery to be built 25 kilometres north of Kitimat to process 550,000 barrels a day from Alberta's oil sands.

The projected capital cost of the refinery is $16 billion. The plan also includes a $6-billion oil pipeline and a $2-billion gas pipeline. It may also incorporate its own ocean-going tankers at a cost of $1 billion, Black said.

Black said he's on the verge of signing a memorandum of understanding with a consortium of investors, though he would not name the participants.

The owner of Black Press said he originally planned the refinery at the terminus of the Enbridge Northern Gateway pipeline, saying he hoped the plan would shift the debate about that project, which has sparked widespread criticism in B.C. from many who believe the environmental risk is too great.

Black said he's met with Enbridge officials and is still open to working with them, but he thinks the original Northern Gateway plan likely will have to be reworked or scrapped.

He said there has been and still is little interest in the oil patch for a refinery, but oil producers will be happy to sell the oil.

Coastal First Nations spokesman Art Sterritt said First Nations groups already have concerns with the way Black has decided to go public with his refinery plans.

Coastal First Nations is an umbrella group representing some of the largest aboriginal groups in B.C.'s north and central coasts.

"He's (Black) already made the same mistake that Enbridge has made and that is going public and trying to jam people on a project before you actually go and talk to the First Nations," said Sterritt.

Clark said the refinery proposal comes close to meeting B.C.'s five conditions supporting heavy oildevelopments. The conditions include meeting strict environmental codes and ensuring the province receives adequate compensation, but they have caused tensions between Alberta and B.C. over Northern Gateway.

She said Black's plan calls for reduced greenhouse gas emissions and offers less environmental risk from oil tanker shipping accidents due to the use of smaller vessels.

Energy Minister Rich Coleman said Black's project may end up on provincial land in the Kitimat area.

"We have Crown land up and around the Kitimat area that's held for industrial use, so we'd be able to look at that for that type of use," he said.

Opposition New Democrat energy critic John Horgan, who said Clark's statement in the legislature sounded as if she was reading a news release written by Black himself, said he will meet with Black on Monday to discuss his proposal.

Horgan noted any refinery is years down the road.