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August 2014

Opinion: Refining lets us control our oil – Vancouver Sun

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We must build the world’s greenest refinery to build our future and protect our coast

Canada has a problem. We are blessed with a resource — oil — needed by people around the world but we’re selling 99 per cent of that resource to one customer, the United States. We’re selling it at a significant discount. We do this because it’s what the pipeline infrastructure in North America obliges us to do.

Expanding access for Canadian oil products to new markets, especially those with growing demand in Asia, is the clear solution. This is becoming increasingly important as we experience declining demand in the U.S. due to increased self-sufficiency in its market.

I have been an advocate in the past for a pipeline from Alberta to the Pacific, allowing us to export our bitumen to these fast-growing markets in Asia. Canada’s economy loses billions of dollars every year simply because one of our most important strategic resources is in a captive market.

But many British Columbians — and many others across the country — have expressed deep concerns to me about a number of issues associated with building a pipeline and shipping unrefined bitumen off of Canada’s West Coast. They have convinced me there must be a better alternative.

That’s why I have joined Pacific Future Energy, a new company based in Vancouver. The company’s mission is to build the greenest oil refinery in the world in a manner that respects First Nations consultation and accommodation, provides tangible economic benefits for Canadians, and protects Canada’s West Coast from the threat of a bitumen spill.

Many First Nations feel resource discussions do not always recognize and respect their role in the process. From the beginning, and every step of the way, our partnership with First Nations will ensure we all benefit from traditional and ecological knowledge, while respecting their rights to full consultation and accommodation, all with the goal of shared prosperity and health for future generations.

Many First Nations communities and British Columbians have grave concerns about the impact of a raw bitumen spill along Canada’s West Coast.

Bitumen sinks to the bottom of the ocean and would cause long-lasting devastation. Refined products evaporate within a short period, posing a much smaller risk.

The livelihoods of commercial and recreational fishermen, loggers, tourism operators, as well as indigenous peoples’ ways of life that go back thousands of years, would be irrevocably altered if a bitumen spill were to occur.

To see something as important as the future of our energy industry not rooted in respect and recognition of those issues would not be acceptable to me.

Building the world’s greenest refinery isn’t just good public policy, however. It’s also good business.

Many critics of building Canadian refineries see the world through the prism of multinational companies with global networks of refineries, shareholders, supply routes and investment priorities that are often beyond our borders. Their assertion that a new refinery in Canada can’t make a profit is simply not backed by economic realities.

Dozens of refineries in the U.S. Midwest — which are almost exclusively processing Canadian bitumen sent to them by pipelines — are generating an average profit of $23.50 per barrel by refining Canadian crude into products for sale in the U.S.

The economics of refining are so good, the one per cent of Canadian crude not sent to the U.S. last year was piped across the continent to the Gulf of Mexico, put on ships, carried across the Atlantic Ocean and delivered to Bilbao, Spain. There it was refined and sold on the European markets at a profit.

These are dollars and jobs that could and should be realized in Canada. Moreover, refining our hydrocarbon resources allows us to ensure all possible steps are taken to minimize the impact these resources have on the environment. Even the industry’s harshest critics would agree that selling high-efficiency products, refined in Canada, is far better than simply shipping raw bitumen out of the country.

The only viable solution for the problems facing Canada’s oil industry is to expand to new markets. The way to make this acceptable to a great number of Canadians — especially First Nations — will be through a refinery that delivers jobs and economic benefits for Canadians, while protecting our coast at the same time.

Stockwell Day is a former minister of international trade, treasurer and acting premier of Alberta, and Conservative MP for Okanagan-Coquihalla, and is now the chair of Pacific Future Energy’s advisory board, as well as a senior adviser to the company’s management team.

By Stockwell Day, Special to the Vancouver Sun

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Ex-MP Stockwell Day joins company planning to build B.C. bitumen refinery – Globe and Mail

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Stockwell Day has joined the leadership team of a Vancouver company that’s planning to build a $10-billion oil sands refinery on the West Coast.

The former politician, who has held high-profile cabinet posts in the federal and Alberta governments, has been hired as a special adviser at Pacific Future Energy Corp. and will sit on its board of directors. He’ll also head an arm’s-length advisory council that’s expected to be formed over the next few months.

“I’ve been very gratified that I’ve been involved in a number of projects since leaving politics, but this has to be right up there in terms of something that’s exciting for me,” Day said in an interview from Vancouver.

He said the proposed refinery, which bills itself as the world’s greenest, could be a “legacy project for Canada.”

Oil sands producers have been keen to access lucrative Asian markets, but stiff opposition to proposals such as Enbridge Inc.’s Northern Gateway pipeline has put a damper on those ambitions. One of the biggest environmental concerns has been the prospect of bitumen-laden tankers navigating coastal waters.

The Pacific Future proposal – along with others being floated by B.C. newspaper magnate David Black and aboriginal businessman Calvin Helin – would mean refined products, rather than heavy oil, would be shipped on tankers to Asia, making a potential spill less damaging.

Day’s political experience spans the two provinces with the most at stake when it comes to West Coast energy exports. After his time in Alberta’s Progressive Conservative government, Day was the MP for the British Columbia riding of Okanagan-Coquihalla, first for the now-defunct Canadian Alliance and then for the Conservatives.

He also has insight into the thinking of potential buyers of Canadian resources on the other side of the Pacific, having served as the federal trade minister and minister for the Asia-Pacific gateway.

The Pacific Future proposal would mean “high-tech, long-term jobs” for Canada, said Day, who left government in 2011.

“We’re talking about refining product here rather than shipping what really is raw product to other countries and seeing the jobs produced there.”

The environmental aspect is also key, said Day.

“I’ve talked with enough people all over British Columbia to realize that this is a genuine concern and a real impediment in the minds of many people.”

Day said he’s confident there will be interest in the project from both sides of the Pacific.

“What I’ve seen over the last few years in Asia … they’ve got a sincere desire to deal with their own environmental issues and even for them, there are some political advantages for them to be seen as receiving refined product,” he said.

And there’s interest from Alberta, too, he added.

“I can honestly say I’ve never ceased talking with people from Alberta – investors and CEOs – since the days I was in Alberta about the challenges of a unique product, but a product that in my view needs to be refined and needs to be refined here,” he said.

“Of course, you have to make the economic case as well as the environmental case and this project does that.”

Day said he hasn’t talked to his former colleagues in Ottawa about Pacific Future, but “I have to think this would align with many of the aspirations of the federal government vis-a-vis Canadian trade and Canadian jobs.”

The Pacific Future leadership team includes venture capitalists and former provincial and federal government advisers. Its executive chairman, Samer Salameh, has experience financing and building telecommunications infrastructure for Mexican conglomerate Groupo Salinas.

Pacific Future has also made First Nations engagement a priority. One of Salameh’s first hires for the management team was Jeffrey Copenace, who was deputy chief of staff to former Assembly of First Nations chief Shawn Atleo and has worked with the Ontario and federal government on aboriginal issues.

Pacific Future says the refinery will be built in 200,000-barrel-per-day modules, with the ability to expand to a total of one million barrels per day.

It aims to pick a location later this year for the plant and begin the regulatory process next year.

Lauren Krugel Published Thursday, Aug. 21 2014

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Ewart: Day joins firm with bold B.C. refinery plan – Calgary Herald

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Stephen Ewart, Calgary Herald 08.21.2014

Former Alberta and federal cabinet minister Stockwell Day says he’s not a “trophy in the window” or a conduit to government investment in his new role with an upstart company proposing an ambitious oil refinery project on the B.C. coast.

And ambitious is a polite way of saying risky – possibly foolhardy.

Day was announced Thursday as a senior adviser and board member for Pacific Future Energy Corp., a little over two months after the Vancouverbased enterprise revealed its $10-billion plan to refine bitumen from Alberta’s oilsands on the West Coast and ship refined petroleum products to Asia.

The high-profile appointment came as Pacific Future prepares for a second round of funding commitments from private investors to build what would be among the most complex oil refineries in the world and one of the first constructed in Canada in three decades.

Day is adamant the company isn’t looking for taxpayer money.

“One of the attractive elements for me is that they’re not looking for that (government funds). That might have given me some pause,” he said in an interview from Vancouver. “We are presenting it to investors as stand-alone without government financial aid.”

Pacific Future announced plans in June for a 200,000-barrel-a-day refinery – expandable to 1 million barrels – for the northern B.C. coast two years after Kitimat Clean Ltd. had proposed a $32 billion, 550,000-barrel-a-day refinery project in the area. A smaller refinery is proposed by aboriginal businessman Calvin Helin.

The companies have promoted their projects as a solution to the fears of B.C. residents about the impact on the coastal environment and economies from a spill of heavy oilsands crude. Their premise is refined petroleum will evaporate more quickly in the ocean. Offshore oil spills are a major concern for opponents of the two proposed pipelines – Northern Gateway and Trans Mountain expansion – across B.C. to tidewater and Pacific Rim markets for growing volumes of Canadian oil.

The industry has historically sold unrefined crude internationally rather than products such as gasoline. Nonetheless, Pacific Future pledged to build the world’s “greenest” refinery, echoing a promise of B.C. Premier Christy Clark to develop the world’s “greenest” LNG industry in the province.

Energy and politics are inseparable these days in Canada and Day – a former Alberta treasurer and president of the federal government’s Treasury Board – can bridge the two worlds.

A fiscal conservative who represented Red Deer North for the Tories provincially and B.C.’s Okanagan-Coquihalla riding federally, Day left politics after 25 years in 2011. Pacific Future said he offers “a unique vantage point” on the sometimes testy political relations between British Columbia, Alberta and Ottawa over the risks and rewards of energy development.

Pacific Future, under executive chairman Samer Salameh, understands that dynamic.

“They told me my profile would be helpful along with the experience that goes with it,” said Day.

The challenges of an industry that even the Canadian Fuels Association acknowledged in December is “low return, low growth, capital intensive, politically sensitive and environmentally uncertain” helps explain the lack of new refineries in recent decades.

Day contends he’s optimistic “the stars are aligning nicely for the economic case to be made.”

Kitimat Clean, led by newspaper magnate David Black, has asked Ottawa for a loan guarantee on part of its costs but Pacific Futures isn’t contemplating such a request.

Day wouldn’t rule out an oilsupply agreement similar to what the Alberta government signed with North West Redwater Partnership building 50,000-barrel-per-day upgrader and refinery near Edmonton that’s been hurt by cost-overruns.

In 2009, Irving Oil shelved a 300,000-barrel-a-day expansion of its refinery in Saint John, N.B., because it wasn’t economically viable.

In its 2013 World Oil Outlook, the Organization of Petroleum Exporting Countries forecast “a challenging environment for North American refiners through 2035.”

Day said he is “cautiously optimistic” on securing the required funding for the multi-year project that will see its first engineers arrive from Europe this month. The company has said it wants to select a refinery site before the end of the year and could initiate the regulatory process in 2015.

There’s a lot of heavy lifting before shovels break ground and Day said project timelines won’t supersede the commitment to consult with First Nations.

“Timelines are important to investors and we’ve made it clear to investors these will only be achieved with full, responsible and proper engagement on the aboriginal side,” he said.

Day is in the process of putting together an external advisory board – he wants a half-dozen “diverse, eminently qualified experts” – to provide Pacific Futures with arms-length advice on challenges from aboriginal relations to developing markets overseas.

He promised the advisory board members won’t be “just trophies in the window” but will add valuable insight.

Day is the first person associated with the B.C. refineries I’ve heard talk about the economic drivers – versus the environmental advantages or strategic imperatives for Canada – so he’s already moved beyond window dressing and is actually getting down to business.

Steph en Ewart is a Calgary Herald columnist

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Stockwell Day joins push for $10B B.C. oil refinery to resolve his ‘irritation’ over dependence on U.S. – Financial Post

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Claudia Cattaneo | August 21, 2014 12:06 PM ET

Proponents of controversial energy projects seem to be putting increasing value on the bare-knuckle experience gained in politics to help manage potentially conflicting industry, community, aboriginal and environmental interests.

Stockwell Day, the former federal international trade minister and former Alberta treasurer, has joined the management team of Pacific Future Energy Corp. as a senior advisor, director, and chair of the company’s advisory committee. The Vancouver-based company backed by Mexico’s Grupo Salinas is proposing a $10-billion refinery on British Columbia’s North Coast.

He follows on the path of Jim Prentice, the former federal cabinet minister who was recruited earlier this year to win aboriginal support for Enbridge Inc.’s Northern Gateway pipeline through northern British Columbia. Mr. Prentice left the assignment mid-way to run for Alberta premier.

TransCanada Corp. has tapped Phil Fontaine, the former national chief of the Assembly of First Nations, as a consultant to win aboriginal support for its Energy East pipeline project.

And while not a private sector recruit, Gary Doer, Canada’s ambassador to the United States and the former premier of Manitoba, has emerged as a top spokesman for the Keystone XL oil sands pipeline, prioritized by Canada and proposed by TransCanada Corp., in the face of often below-the-belt opposition in the United States.

Mr. Day said he took the assignment because the refinery has the potential to be “an exciting legacy project for Canada.”

“The principals of the company advised me, when they contacted me, that they liked the fact that I had Alberta experience as minister of finance,” Mr. Day said in an interview Thursday.

“I am acutely aware of the unique challenges of the industry there. They like the experience I brought to the table as president of the Treasury board federally, which involves understanding the regulatory process, and the added blend of minister of international trade, which brought me in close contact with the needs that are relevant in Asia.”

The Pacific Energy project addresses challenges facing the transportation of Alberta’s oil sands oil to the B.C. coast and in the ocean, he said.

The refinery would be built in partnership with First Nations in the Prince Rupert area, be the world’s greenest by using advanced European refining technology, capture and store greenhouse gases.

It would take bitumen from Canada’s oil sands and process it into gasoline, diesel, kerosene and other products that would be less harmful to the environment if there is a spill, and create lots of high-tech refinery jobs in the province.

“It deals with what has been a constant irritation to me, the fact that our Canadian [oil] product, 99% of it goes straight to the U.S., which is becoming a diminishing market as they approach self-sufficiency,” Mr. Day said. “It’s time to open up these other markets.”
Peter J. Thompson/National Post, file
Peter J. Thompson/National Post, fileMr. Day said he took the assignment because the refinery has the potential to be “an exciting legacy project for Canada.”

The plan was unveiled in June by executive chairman Samer Salameh, who is also the head of telecommunications businesses and new business development for Grupo Salinas, a large conglomerate based in Mexico owned by billionaire Ricardo Salinas with more than 100,000 employees and operations in 11 countries.

“We are very excited to have Mr. Day join our team,” said Mr. Salameh said in a statement. “Our project office is now up and running at a robust pace. Our goal is to finalize the refinery site by the end of 2014. We expect to enter into the regulatory process in 2015.”

It’s one of a handful of projects proposed so far – including Northern Gateway and Kinder Morgan’s TransMountain pipeline expansion — to link growing production from the oil sands in Alberta to consumers in Asia.

British Columbians have shown scant enthusiasm for the plans, which they fear present too much environmental risk and too little economic reward.

Mr. Day said he agrees with B.C.’s view that “there should not be a carte blanche acceptance to an energy proposal until it meets certain conditions.”

That is why he believes the Pacific Future proposal is well placed.

“It addresses the issues that are properly raised by our indigenous people,” he said. “It addresses environmental concerns about raw bitumen hitting our coast line, and it addresses the economic issues of the value added opportunities being created here in B.C. for decades to come — It’s a trifecta of interests that wind up being beneficial to everybody concerned.”

A politician couldn’t have said it better — but Mr. Day, 64, said he has no plans to return to politics. He also doesn’t envision government support for the refinery “at this point.”

“We have to show, regardless of what a government may do, that the economic fundamentals are in place for a standalone project and we believe we can make that case,” he said.

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VANCOUVER (August 21, 2014) Pacific Future Energy Corporation (Pacific Future Energy) is pleased to announce that former International Trade Minister, former Treasurer (Minister of Finance) and Acting Premier of Alberta, and former Leader of the Her Majesty’s Official Opposition, the Honourable Stockwell Day, P.C., has joined its management team as a Senior Advisor, Director, and chair of the company’s Advisory Committee. Pacific Future Energy plans to build and operate the greenest refinery in the world on Canada’s west coast.

“We believe it is critical to Canada’s national strategic interest to gain access to international markets for Alberta’s oil. As the former federal regional minister for British Columbia, and a former Alberta cabinet minister, I have a unique vantage point from which to understand what it takes to make this happen,” Mr. Day said.

“This can only be accomplished in full partnership with First Nations, with true economic benefits for Canadians, including Albertans and British Columbians, all the while protecting Canada’s cherished west coast from the catastrophic effects of a possible bitumen spill,” added Mr. Day.

“We are very excited to have Mr. Day join our team,” said Samer Salameh, Executive Chairman of Pacific Future Energy. “Our project office is now up and running at a robust pace. Our goal is to finalize the refinery site by the end of 2014. We expect to enter into the regulatory process in 2015.”

The Pacific Future Energy refinery in B.C. will help to build our future by creating thousands of long term jobs and economic stability at home by expanding Canada’s oil market access. It will also protect Canada’s west coast by eliminating the threat of a bitumen spill. This will be accomplished by shipping products refined in Canada. The refinery will utilize Near Zero Net Carbon emissions technology and will be the greenest refinery in the world.

The $10 billion refinery is being designed to be built in modules, the first processing 200,000 barrels of bitumen per day, ensuring that it both is scalable and flexible. The bitumen will be converted into gasoline, diesel, kerosene and other distillates.

“From the very beginning, and every step of the way, our partnership with First Nations will ensure that we all benefit from traditional and ecological knowledge, while respecting their rights to full consultation and accommodation — all with the goal of shared prosperity and health for future generations,” added Jeffrey Copenace, Senior Vice President, Indigenous Partnership.

About Pacific Future Energy

Vancouver-based Pacific Future Energy is a company that has been developed to finance, design and construct the world’s greenest oil refinery in British Columbia, Canada. The management team consists of leaders from the venture capital, corporate and government sectors, who share the belief that while it’s in Canada’s national strategic interest to diversify its markets for oil, it should be done in a socially and environmentally responsible manner while ensuring the protection of Canada’s west coast.

For further information or to request an interview please contact:

Alexandra Pecoskie
Citizen Relations
(604) 604-647-6256