Pacific Future Energy
Samer Salameh, Chairman, Pacific Future Energy joins BNN’s The Street for a look at how his proposed $10 billion green bitumen refinery is bracing for a new crude reality.
By Yadullah Hussain | January 26, 2015 5:56 PM ET
TORONTO • The company proposing a $11-billion heavy oil refinery in British Columbia is pushing ahead with the project despite market volatility and is seeking $25-million in financing, according to its chairman, Samer Salameh.
“We are raising $25 million and that would take us to the permitting process, which would take two to three years,” Mr. Salameh, chairman of Pacific Future Energy Corp., said in an interview Monday on the sidelines of a speech to a business audience in Toronto. “We are down to finalizing two sites on the B.C. Coast, and we will be filing for an environmental assessment by the end of this year.”
Mr. Salameh previously managed the U.S. business interests of Mexico’s Carlos Slim, the second-wealthiest investor in the world, according to Forbes magazine. The management team includes Stockwell Day, a former federal minister for the Asia-Pacific Gateway, and Shawn A-in-chut Atleo, a former national chief of the Assembly of First Nations. Mark Marissen, a political strategist and former-husband of B.C. Premier Christy Clark, is also part of the team.
The company has ambitious plans to build the world’s “near net-zero carbon emission facility and the cleanest refinery in the world,” powering it with natural gas and renewable to reduce emissions by 40%. Carbon-capture technology will further reduce emissions by 52%, the company claims.
Mr. Salameh said the technology is “proven,” but admits that it will be the first greenfield refinery of its kind in the world.
The project is hoping to capture “money left on the table” by Canadian producers. Canadian heavy crude benchmark Western Canada Select has been trading at a discount of about $19 per barrel to the U.S. West Texas Intermediate blend over the past five years. Last year, Canadian companies “subsidized” U.S. refiners to the tune of $15.9-billion, Mr. Salameh noted.
“With the first tranche of the refinery is 200,000 barrels per day, [assuming a $30 difference] this project will create $1.7-billion a year, every year for 75 to 100 years.”
Refineries have been the subject of heated discussions in Canada, as most analysts contend the facilities are uneconomic in the country, although labour unions such as the Alberta Federation of Labour believe an integrated upgrader-and-refinery plant “would be highly profitable.”
Suncor Energy Corp. and Total SA abandoned a plan to build a heavy oil refinery project in Alberta in 2013.
“It is a very valid point if the project was being built in Alberta. Nobody has seriously considered building a refinery in B.C.,” Mr. Salameh said. The 200,000-bpd proposed refinery would have cost an additional $4-billion to $5-billion in Alberta due to labour and construction costs, according to the chairman.
Pacific will commission the modules in Asia and ship them to B.C. in a bid to cut costs.
“For a refinery, you are either close to the source, or close to the market. We want to be closer to the market as Tokyo is 10 days away from B.C by ship.”
The proponent believes the project meets B.C.’s five conditions outlined last year by Premier Clark, although the company is not seeking any subsidies from the government.
The five conditions were originally designed for Enbridge Inc.’s Northern Gateway pipeline, but are being used as a template by other proponents seeking to build projects in B.C.
Canadian refineries also face strong competition from new refineries in Asia, many of which are designed to process heavy oil, such as raw bitumen from Canada.
“Clearly, they [Asian customers] would prefer us to ship raw bitumen,” Mr. Salameh said. “But for environmental reasons and resistance from communities, we don’t think that’s the right way to go. But we have not seen any issue in selling our product just because it will be refined.”
Pacific Future Energy plans to build world’s greenest refinery in B.C.
By Ovide Mercredi, Special to the Vancouver Sun, Photograph by: Ian Smith, PNG
Canada will be celebrating 150 years since Confederation in just two years.
What will First Nations celebrate?
When I think about that, I think about my nation, the Misipawistik Nation, which sits near the point where the Saskatchewan River meets Lake Winnipeg. The name means Rushing Rapids in Cree, but the Grand Rapids hydro dam completed in 1968 silenced those rapids, forever.
When this dam was created, four thousand workers and their families descended to work on the dam construction. Immediately, brand new homes, a school and a modern hospital were built for the hydro workers.
Our neighbour Cree community of Chemahawin was flooded. An entire Metis/First Nations community had to be relocated to a new village. My family was forced off lands we had occupied for more than a century. My parents did not even have the time to salvage the logs of our family home.
The inequality between First Nations and the new Hydro community was stark.
After years of profound social upheaval, it took until 1991 — 23 years later — to offer about $5 million to the community, even though the dam created more than a billion dollars in economic activity. This was followed with a settlement with the fishermen on April, 2001, for $7 million, 32 years later.
These settlements were meagre and unfair.
The mentality at the time treated local people, mostly First Nations and Metis, as obstacles whose support should be purchased with the minimum amount possible.
The hunting and fishing economy was treated as a residue from the past with no significant social or economic value.
More recently — in 2011 — I negotiated an additional agreement valued at just over $100 million to be paid to my community over a 50-year period. This was 42 years after the dam was built.
Only three years ago, the Metis and Town of Grand Rapids finally had a water and sewer service plant constructed, a benefit of developement that Hydro employees had enjoyed from the early construction of the dam. My mother, at age 90, could finally have clean drinking water.
Clearly there must be a better way.
There was extreme resistance — like we still see from many today — to the fact First Nations require respect and recognition as nations, as another order of government.
We know today that when industry wants to build things on First Nations territory, it requires more than just consultation and accommodation; it requires free, prior, and informed consent.
Respect and recognition — based on rights and title and treaty rights — are very important as a foundation for the economic opportunities required to lift First Nations communities out of poverty.
One of the biggest issues on Canada’s agenda is the issue of energy. First Nations should be driving the vision and participate in all aspects of any energy projects, or we should reject them. First Nations care about our environment and also seek mutual economic gain. It’s time to truly share the wealth, in a sustainable way.
Many First Nations leaders who share the concerns I have highlighted here continue to feel that the only way to press for our rights is through protest, treaty negotiations and court challenges. While all of those avenues have their time and place, I believe the time has come to go past government and work with industry directly.
Governments have a role to play in the reconciliation process but if our focus is on economic reconciliation — ensuring that, when we invite business into our traditional territories, the value of our lands, our traditions, our people are appropriately recognized and that our communities are beneficiaries, unlike in my experience in Manitoba — then industry is where we need to focus.
I am putting these principles into action by serving as an adviser to Pacific Future Energy, a new company with bold plans to build the world’s greenest refinery in British Columbia.
PFEC has made a commitment to build this refinery in true partnership with First Nations, as an order of government. The company knows it must collaborate on developing plans, and gain informed consent before — not after — finalizing engineering and spending hundreds of millions of dollars on schemes that local First Nations can’t support. This is in keeping with the principles of the recent Tsilhqot’in decision that for the first time formally recognized title rights on lands without treaty in British Columbia.
This project will hopefully be a model for all resource projects in the future.
We must always leave the smallest impact on the environment we can. We don’t expect the fossil-fuel industry to be gone overnight — First Nations drive cars and trucks as anyone else, and use fossil fuels for many things — but we can certainly be the catalyst for benefiting from these resources from the land in the most environmentally sustainable way.
This means near zero carbon emissions from the refinery itself, thus honouring the airshed around the refinery and showing the world that we can meet the highest standards.
This means protecting the coast from a bitumen spill, something that would be devastating for everyone’s way of life on Canada’s west coast. Diesel, jet fuel and gasoline can evaporate after a spill. Bitumen could kill the fragile ecosystem for generations.
A refinery also means we can supply northern coastal First Nations communities with cleaner diesel from a nearby refinery rather than barging it all the way up from Vancouver. These are the kinds of things we need to explore as we define the partnership.
But, most important, it means sharing the wealth.
There is no question that respecting inherent rights and achieving a true genuine partnership will lead to a brighter, healthier and more prosperous future for all of Canada for generations to come.
I hope First Nations leaders who agree will join with me in this new dimension of our fight for inclusion and equality.
Ovide Mercredi sits on Pacific Future Energy’s advisory board, and is a former National Chief of the Assembly of First Nations, a constitutional lawyer and an advocate for First Nations’ rights for more than 40 years.
VANCOUVER, BRITISH COLUMBIA–(Marketwired – Jan. 20, 2015) – Pacific Future Energy Corporation (PFEC) is pleased to announce that Jacques Benoit, a 30-year engineering veteran in the oil and gas industry, has joined its management team as Senior Vice President – Engineering.
Mr. Benoit will be responsible for providing the management team with the day-to-day advice necessary to move the project forward, and will be immediately focused on preparing for the environmental assessment process. He will also be responsible for coordinating PFEC’s contracts and relationships with outside engineering contractors.
“We are very pleased that Mr. Benoit has joined our team,” said Samer Salameh, Executive Chairman. “He will bring important insights to us as we prepare our plans for the world’s greenest refinery, building our future and protecting our coast.”
Mr. Benoit brings tremendous experience to the role, most recently serving as Senior Vice President for the Environmental and Water division of SNC-Lavalin, with over 1300 employees and revenue in excess of $200 million. He is also the author of many industry publications.
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.