Media Coverage

Our Jacques Benoit talks gas prices—and our refinery

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CKNW’s Steele & Drex: B.C. company proposes new gas refinery to combat rising prices

With gas prices in Metro Vancouver reaching a record high, paying almost $1.50 a litre is a frustrating reality for most drivers.

Part of the frustration can be traced back to a province-wide decision to reduce the number of refineries in B.C.

Metro Vancouver itself has just one, located in Burnaby, which leaves the province largely at the mercy of refineries south of the border.

One company, however, is looking to establish a new refinery closer to home.

In an interview with Steele & Drex, President and COO of Pacific Future Energy Jacques Benoit explained how the company wants to refine gas here in B.C.

Their proposed refinery would be built between Terrace and Kitimat, and receive raw bitumen from Alberta by rail.

Benoit says this would keep profits from Canadian resources in Canada.

“We ship 98 per cent of our natural resources to the Americans, they refine it and send it back to us. There’s something wrong with that equation.”

Listen to the full interview

And Pacific Future isn’t the only company looking to establish a refinery in the province – Kitimat Clean Ltd. has also filed a proposal to establish one in the same area.

Despite recent controversy surrounding gas transport by pipeline, both companies claim that their refineries would be environmentally safer in the long run; a sentiment reflected by Green Party leader Elizabeth May.

In a previous interview with Steele & Drex back in Nov. of 2016, May said she would much prefer the kind of shipping structure Benoit is proposing.

“Guess what? The safest way to ship bitumen is by train. It’s one of those facts that’s inconvenient for people.”

May went on to say that building more refineries in B.C. and Alberta would do more for Canadian jobs than any pipeline.

“Fossil fuel masters of the universe who are digging up bitumen in northern Alberta already own refineries in other countries and have no incentive to create more Canadian jobs. They’re perfectly happy to have us assist them in taking raw bitumen to their refineries.”

Benoit says that with a refinery, the price of gas in Vancouver could drop to levels similar to those seen in Edmonton.

Without one, he says prices could keep climbing.

Benoit concluded by saying the province is wasting an opportunity.

“The oil sands are going to continue to produce… if we don’t process it in the right way and keep it here in Canada, somebody else is going to do it.”

Read earlier media stories

Shipping ‘Neatbit’ By Rail Could Be The Answer We’re Looking For. So Why Aren’t We Looking At It?

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Alberta Oil Magazine 11 August 2016

It’s cheap, it’s safe and it’s practically harmless if spilled. So why isn’t raw bitumen-by-rail gaining more traction with industry and government?

By MARKHAM HISLOP

Albertans are mad as hell about pipelines.

They’re mad in news stories and op-eds, they’re mad in the Legislature, and, boy, are they ever mad on social media. Many believe they traded a carbon tax for pipelines. So, Premier Notley, where are the pipelines, they ask? You hear it in the hockey rinks of Edmonton, the downtown eateries of Calgary and in the bars and cafés of rural towns. Albertans understand that the continued growth of the oil sands—and the continued growth of the provincial economy—depends upon gaining better access to markets for oil sands crude. But what if there was a better, or at least complementary, way to get Alberta oil to market—one that didn’t require exhaustive environmental reviews, and was cost-competitive with pipelines? Wouldn’t governments want to pursue it?

Randy Meyer regularly asks himself that very question. He’s the vice-president of business development and logistics for Altex Energy, a Calgary-based company that ships undiluted bitumen, or “neatbit,” by rail from Saskatchewan to American refineries. Meyer says that the 20,000 barrels of Alberta bitumen that currently wend their way to Midwestern refiners every day could become a flood if governments and industry embrace neatbit.

Neatbit, according to Meyer, has four significant advantages over diluted bitumen, or “dilbit,” which contains 30 percent diluent and is usually shipped in pipelines. For one, diluent often costs more than the oil itself. Furthermore, oil sands producers buy condensate at a premium to its value when it arrives at U.S. refineries, which are configured to refine heavy oil. Extracting diluent at Albertan rail terminals would allow oil sands operators to recycle it, keeping its market value and not paying to transport it to the U.S. where it sells at a discount.

Also, neatbit-by-rail does not require lengthy, costly environmental reviews. The product is already covered by existing railway hazardous materials regulations. There is some pressure from American environmental groups to more strictly regulate or ban oil-by-rail in general, but for now neatbit gets a free ride. It’s worth mentioning too, that in the event of a derailment, neatbit is safe. It has a very low flash point, and there’s no diluent to form a volatile layer of vapor above it in the tank, so it doesn’t easily catch on fire. And if a tank car ruptures, neatbit congeals into a blob instead of running into rivers or farmers’ fields as dilbit has in the past. Finally, North America has a well-developed rail infrastructure, which already has excess capacity due to the recent and rapid decline of the coal industry.

Overall, the industry is warming to neatbit. In April, Cenovus Energy repeated its interest in shipping undiluted bitumen by rail, which was first floated in 2013. At that time, the Calgary company said it was purchasing some of the specially heated and insulated tanker cars needed to keep the bitumen soft during transit. With the Keystone XL pipeline project rejected by U.S. President Barack Obama, and the prospect of new Canadian pipelines to the West Coast looking shaky, Cenovus CEO Brian Ferguson told reporters that removing the high-priced condensate from diluted bitumen could improve margins by as much as $2 to $4 a barrel. “This would allow us to tiptoe into the midstream part of the business,” he said. “Anything we can do along the value chain to change or improve the product, or change or improve the market is a good thing.”

Kevin Birn of IHS’s energy team wrote a 2014 report called “Crude By Rail: The New Logistics of Tight Oil and Oil Sands Growth.” In it, he explains why Cenovus, and other Alberta producers like MEG Energy, are interested in neatbit. Oil-by-rail is here to stay, he writes. “The ability of railroads to connect producers with remote refineries, or to go more readily where pipeline may be challenged to reach, will make rail a permanent feature of delivering inland crude (heavy and light) to refiners in North America.”

So how does neatbit-by-rail compare in cost to dilbit-by-pipeline? As a rule, if both means of transport are carrying the same product, then pipelines are cheaper by about $8 a barrel. But the cost of diluent, or “diluent penalty,” changes the calculation. IHS estimates the average transport cost for dilbit by pipeline at $16 per barrel, as opposed to $20.25 for neatbit-by-rail. Birn says that in a high pipeline cost-to-low rail cost scenario, neatbit is competitive. But Meyer points out that since the publication of the IHS study in 2014, rail fuel and freight costs have dropped significantly, making neatbit even more competitive; about 16-percent less than pipelines, by his calculation. The IHS report argues that, at the very least, rail’s “ability to move raw bitumen from Canada’s oil sands is cost advantaged over moving bitumen blends.”

And building pipelines to move Alberta crude is a political minefield, with almost three million b/d capacity either rejected or delayed over the last five years. With global oil prices forecast to reach $60 to $70 per barrel in 2017, and a gradual recovery now in sight, time would appear to be of the essence for the Canadian industry. The Canadian Association of Petroleum Producers (CAPP) forecast in May that Canadian crude oil production will rise from 3.8 million to 4.9 million b/d, or 5.5 million b/d if diluent is included, by 2030. “Canada’s energy future relies on our ability to get Canadian oil and gas to the people who need it,” says CAPP CEO Tim McMillan. “Connecting Canadian supply to new and growing markets abroad, safely and competitively, is a top priority.”

Why, then, are oil sands producers only starting to come around to neatbit-by-rail? Not surprisingly, just as neatbit has its upsides, it also has some downsides, according to IHS. For one, it travels via pipelines to rail terminals as dilbit, and Alberta and Saskatchewan currently lack the necessary infrastructure to handle it, such as diluent recovery units and neatbit loading facilities—though Meyer says some Altex customers are already tweaking their production equipment to reduce or eliminate diluent altogether. Today, Cenovus is considering the construction of a diluent recovery unit at its Bruderheim crude-by-rail terminal near Edmonton. Meyer adds that Altex’s modern high-throughput loading facility in Lashburn, Saskatchewan has already demonstrated that costs can be lowered significantly enough through efficiencies. But refiners would have to invest in receiving infrastructure to handle neatbit, which needs to be heated to keep it flowing.

The U.S. Gulf Coast has many refineries equipped to handle heavy oil—regional input capacity is about 1.8 million b/d, but it’s unclear just how many could potentially handle raw neatbit.

One refinery that would be equipped to handle neatbit is the $15-billion Pacific Future Energy project, planned for a site near Terrace on the British Columbia coast. In June, it filed with federal and provincial regulators a formal project description that could kick off a two-year review process. The 216,000-b/d facility is billed by promoters as the “world’s greenest bitumen-to-fuels refinery,” with near net-zero carbon emissions. Steam-heated and insulated rail cars operating at 80 degrees Celsius would transport Alberta neatbit the 1,000 kilometers over the Rockies to an unloading facility specifically designed for raw bitumen. Jacques Benoit, chief operating officer of Pacific Future Energy, is a big fan of neatbit because of the safety factor, which is critical in the superheated political atmosphere of B.C. “Neatbit is much safer than moving gasoline, for instance. If there were to be an accident, if there was a crack in the railcar, the neatbit would fill that crack and prevent product from coming out,” he says. “As soon as the neatbit hits the air at 20C it becomes a near-solid again. Compare it to lava coming out of a volcano, as soon as the lava hits the air it solidifies. That’s similar to this product.”

For his part, Kevin Birn at IHS says neatbit could very well be the answer the industry is looking for, but it’s by no means the only contender. “What you’re looking at is a proliferation of a lot of different options for moving crude out of Western Canada, a lot of creativity, but there’s no silver bullet,” says Birn. “I expect to see a lot of niche opportunities and neatbit would be one of them.” But if that is the case, then why aren’t the Alberta and Canadian governments backing neatbit-by-rail, even if only as a short-term bridge to pipelines or as a complementary option as oil sands production grows?

Terry Hubbard is an assistant deputy minister with Natural Resources Canada. His department is aware of the neatbit-by-rail option, but has not studied the economics in detail. Ottawa is still operating under the assumption that pipelines are the most cost-effective and preferred way to get oil to market. Furthermore, even though significant new infrastructure funding was announced by the Trudeau government, the feds don’t pick projects. “These are typically projects that are advanced either by the private sector or by different levels of government,” Hubbard says.

To date, the Alberta government has not advanced a neatbit project nor does it intend to. “The Government of Alberta does not have plans to discuss neatbit-by-rail with the federal government,” says Alberta Energy spokesperson Brad Hartle. “Our focus in discussions with the federal government is making sure the pipeline approval process proceeds without undue delay.”

The Alberta Petroleum Marketing Commission, which reports to Alberta Energy, seeks out commercial opportunities to increase crude oil market access and, according to Hartle, has done an analysis of the economic feasibility of neatbit, which it won’t share because the report contains “commercially sensitive information,” he says. The commission has also met with “several proponents of the concept,” including Randy Meyer, over the past few years to “understand the opportunities,” according to the Altex executive. But that’s apparently as far as the Alberta NDP government is prepared to go on neatbit.

Last November, when Premier Rachel Notley announced Alberta’s new climate change strategy, there was a lot of talk about innovation and new technologies being part of the big picture solution to carbon dioxide emission reduction. Unfortunately rail transport is more carbon intensive than pipelines. However, it would get crude to tidewater faster, as it doesn’t need politically charged permits. Randy Meyer and Altex say they can ship bitumen to market safely and cost-effectively in relatively large volumes—if not immediately, then in the near future. IHS, a reputable global energy consulting firm, has confirmed opportunities exist for neatbit in some American markets, and that under certain conditions neatbit is competitive with pipelines.

The Canadian government has made infrastructure money available and could entertain a proposal for neatbit by rail infrastructure from a provincial government or a private company. Both the governments of Canada and Alberta say they are committed to improving market access for oil sands crude.

The question remains whether they and the industry will connect the dots on neatbit before Canada loses another opportunity to tap foreign markets because of an abundance of caution.

Original story from Alberta Oil Magazine

 

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B.C. company promoting green refinery project —Estevan (SK) Mercury.

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Pacific Future Energy is moving ahead with a proposal that was first brought to light in mid-January and is now receiving additional attention at various governmental levels.

Pacific Future’s proposal to build and operate the world’s greenest bitumen-to-fuels refinery in northwestern B.C. is receiving a hearing from local First Nations governments as well as federal and provincial regulators.

“This is the start of our public conversation as we work to build our economic future and protect our coast in Northern B.C. while recognizing and respecting First Nations rights and life,” said Samer Salameh, executive chairman of the Vancouver-based company when the proposal was first aired in public.

The project would receive near-solid neatbit bitumen by rail from Western Canada and refine it into diesel gasoline and other products for export to world markets.

Unlike diluted bitumen traditionally shipped by pipeline or rail, neatbit has a consistency similar to peanut butter. It is stable with a low flammability and is classified as non-dangerous for transport.

“Not only would our proposal traditionally provide a value-added way to get Canadian oil to growing world markets, but it would protect both Canada’s land and marine environments from the effects of a heavy oil or bitumen spill,” said Robert Delamar, CEO of Pacific Future Energy.

“Our plan would take full advantage of the opportunity for Canada by building a near net zero carbon emissions refinery with the world’s most advanced technology. That will ensure an environmentally superior refinery that is also financially and economically sound.”

Jacques Benoit, chief operating officer for the company said, “The project will allow export of refined products instead of diluted bitumen or other unrefined heavy-oil products. Transported in smaller tankers, refined products greatly reduce the risk to the marine environment in the unlikely event of a spill.”

The project is proposed for an area known as the Dubose Flats, about 30 kilometres south of Terrace.

“We are engaging with First Nations in the area in every step of this process, recognizing them as a First Order of Government and honouring the United Nations Declaration of Right of Indigenous People,” Salameh said.

The project is valued at approximately Canadian $15 billion and will create an estimated 3,500 direct jobs in construction and 1,000 in operation.

Pacific Future Energy said they plan to power the refinery with clean-energy sources that include biomass wood-waste from the regional forest industry. This could benefit the forest sector and create additional employment.

Besides the First Nations community, the company said they would also be working with the Canadian Environmental Assessment Agency and the B.C. Environmental Assessment Office on project requirements that include public consultations, environmental assessment and engineering studies.

“We will be listening very carefully to all the feedback and will incorporate community concerns and values in the design,” said Delamar.

Actual construction would be slated for 2018 with the plant entering production mode in 2021.

Original story from The Estevan Mercury

HOW TO SOLVE THE OIL PIPELINES PROBLEM: WHY NOT TRY SOMETHING CALLED NEATBIT? – CHED RADIO, EDMONTON.

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One company is proposing a game-changer for the way Alberta transports oil.

Pacific Future Energy wants to build a refinery on the West Coast by 2021 that would handle only a special type of bitumen. It’s called neatbit and it’s a type of oil shipped by rail in specially designed cars.

Speaking to 630CHED’s Brenton Driedger, Markham Hislop with American Energy News says train derailments happen, but this is far safer than a pipeline.

“Instead of the dilbit pouring out and onto the environment or into the water, as soon as that neatbit hits the air it actually congeals and plugs the crack,” says Hislop.

“And in the off chance that the accident is severe and somehow some of the neatbit gets out of the car, you just bring in a backhoe and gravel truck and just shovel it into the truck.”

Hislop says the West Coast refinery would need to have a complementary plant near Edmonton to ready the product.

“That plant would strip out the diluent and turn the product back into this sort of gooey, peanut butter type of consistency and pump it into specially heated rail cars and ship it by rail over to the coast.”

Alternatively, it could open up other markets as well.

“If you can ship 216,000 barrels a day of this neatbit by rail to the coast, well, you can ship a lot more to the coast and you can ship it to the American markets as well, primarily the Texas Gulf Coast which is set up to refine about 2.7 million barrels a day.”

Hislop thinks Americans hesitant to approve Keystone XL will be happy with rail transport of neatbit.

Full soundtrack

Original story from 630CHED

NEATBIT BY RAIL AN ALTERNATIVE TO OIL SANDS’ PIPELINE PROBLEMS TO USA, ASIA MARKETS – AMERICAN ENERGY NEWS

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posted January 19, 2016

A proposed new refinery on Canada’s West Coast may have the solution to the problems of shipping Alberta oil sands dilbit by pipeline to American and Asian markets.

Diluted bitumen, known as dilbit, contains 30 per cent diluent that has to be added by the producer before the product is shipped by pipeline and then stripped by the refinery at the other end. That means almost one-third of dilbit is a product with no value.

It also means that dilbit can sink if spilled into cold rivers – think Enbridge’s huge 2010 release into Michigan’s Kalamazoo River – and oceans, which is a principal complaint of opponents.

After President Barack Obama’s rejection of the 830,000 b/d Keystone XL pipeline proposal late in 2015, and the serious difficulties experienced in British Columbia by Enbridge (Northern Gateway) and Kinder Morgan (Trans Mountain Expansion) pipeline projects, shipping oil sands bitumen to market has become a significant issue for Canadian energy companies.

Not to mention Texas Gulf Coast refineries that were hoping to buy supplies of the heavy crude oil (Canada currently provides only about 10% of that market, even though it dominates American crude imports at 45%).

But what if bitumen could be shipped in a near-solid state? And shipped not only safer, but possibly cheaper as well?

Neatbit

Neatbit by rail may be much safer than oil by rail, according to Jacques Benoit of Pacific Future Energy

According to Canada’s National Energy Board, oil-by-rail exports to the US rose dramatically from 15,980 b/d in 2012 to 116,215 b/d in 2014, though still a small percentage of the volume transported by pipelines. Just over 3 million b/d is exported to the United States, according to the NEB.

But oil sands production is slated to rise by several million b/d over the next decade or two (the timing is more uncertain after a number of projects were delayed due to low oil prices in 2015). How will that product get to market?

Is neatbit an alternative to new pipelines?

Pacific Future Energy is proposing to build a 216,000 b/d refinery in northwestern BC that would receive its feedstock from Alberta by special rail cars designed to hold and heat bitumen, which would be heated to around 80C for pumping. The rail cars would be steam heated and insulated to keep the bitumen warm for its 600-mile (1,000 kilometres) trip across the Rocky Mountains.

Jacques Benoit, chief operating officer of Pacific Future Energy, says shipping “neatbit,” as the industry calls the goo with the consistency of peanut butter, is far safer than transporting dilbit by pipeline.

“If there were to be an accident, if there was a crack in the railcar, the neatbit would fill that crack and prevent product from coming out,” he said in an interview with American Energy News.

“As soon as the neatbit hits the air at 20C it becomes a near solid again. Compare it to lava coming out of a volcano, as soon as the lava hits the air it solidifies. That’s similar to this product.”

If the neatbit should somehow escape the railcar after a derailment, clean up crews would be using a backhoe instead of vacuum trucks or skimmers, says Benoit.

Why aren’t more companies shipping neatbit instead of dilbit?

Benoit says there are currently 15,000 to 20,000 b/d of Saskatchewan neatbit finding its way to the Gulf Coast. Expanding on a large scale for Alberta oil sands bitumen requires additional infrastructure.

Oil sands operations near Fort McMurray are currently set up to ship dilbit by pipeline 250 to 300 miles (400 to 500 kilometres) to Edmonton. If Pacific Future Energy’s refinery proposal is approved, someone will have to build a plant to strip out the diluent and turn dilbit into neatbit.

Benoit says the cost is relatively small: “Once you add these units in place, they can last for a long time. It doesn’t add much to the overall transportation costs. And you have to remember that the neatbit is 100-per-cent product because it has no diluent,” which significantly improves the shipping economics, whether to the West Coast, or the Texas refineries on the Gulf Coast that consume approximately 2.7 million b/d of heavy crude and where Canada has only a small market share compared to Venezuela or Nigeria.

Benoit says the Gulf Coast refineries prefer neatbit over dilbit because it’s easier and cheaper to handle.

If the Pacific Future Energy refinery is completed by 2021 as planned, Benoit says someone is going to build the diluent stripping plant, perhaps even his own company.

Given neatbit’s safety, cost, and handling advantages, perhaps someone should build the plant sooner rather than later, especially considering the perilous state of Canadian pipeline proposals.

At the very least, someone – the Canadian government? The Alberta government? The Canadian industry? – should be investigating neatbit by rail as an alternative to pipelines.

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PACIFIC FUTURE ENERGY SUBMITS REFINERY PROPOSAL TO REGULATORS – AMERICAN ENERGY NEWS

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posted 19 January 2016

Pacific Future Energy submitted its formal proposal to build and operate what it calls the “world’s greenest bitumen-to-fuels refinery” using bitumen from Alberta’s oil sands last week.

The proposal was submitted to the BC Environmental Assessment Office, the Canadian Environmental Assessment Agency, and Northwestern BC First Nations governments, the company said in a press release.

“This is the start of our public conversation as we work to build our economic future and protect our coast in Northern BC, while recognizing and respecting First Nations rights and title,” said Samer Salameh, executive chairman of Vancouver-based Pacific Future Energy.

The project is valued at approximately $15 billion CAD and will create an estimated 3,500 direct jobs in construction and 1,000 in operation, said COO Jacques Benoit in an interview with American Energy News. Construction could begin in 2018 and production in 2021.

Pacific Future Energy plans to power the refinery with clean-energy sources that include biomass wood-waste from the regional forest industry.

The refinery would receive near-solid neatbit bitumen by rail and refine it into diesel, gasoline, and other products for export to world markets. 

Unlike diluted bitumen (dilbit) traditionally shipped by pipeline or rail, neatbit contains no diluent and has a consistency similar to peanut butter. It is stable, has low flammability and is classified as non-dangerous for transport, according to Robert Delamar, CEO of Pacific Future Energy.

“Not only would our proposal provide a value-added way to get Canadian oil to growing world markets, but it would also protect both Canada’s land and marine environments from the effects of a heavy oil or bitumen spill,” said Delamar.

“Our plan would take full advantage of the opportunity for Canada by building a ‘near net zero carbon emissions’ refinery with the world’s most advanced technology. That will ensure an environmentally superior refinery that is also financially and economically sound.”

Pacific Future Energy says the new refinery will allow export of refined products instead of diluted bitumen or other unrefined heavy-oil products.

“Transported in smaller tankers, refined products greatly reduce the risk to the marine environment in the unlikely event of a spill,” said Benoit.

The project is proposed for an area known as the Dubose Flats, approximately 30 km south of Terrace BC.

“We are engaging with First Nations in the project area in every step of this process, recognizing them as a First Order of Government and honouring the UN Declaration on the Rights of Indigenous Peoples,” said Salameh.

“Engaging with First Nations as a first order of government, with the goal of operating as full partners, is a crucial element of Pacific Future Energy’s plans.  PFEC recognizes and will respect the new industry standard of placing First Nations First.”

Pacific Future Energy now begins working with First Nations and Canadian regulators on project requirements that include public consultations, environmental assessment and engineering studies.

“We will be listening very carefully to all of the feedback that we receive and will incorporate community concerns and values in our project’s design,” added Delamar.

“We believe that social licence or permission must be earned at the concept stage of this project as well as throughout its lifecycle.”

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ENVIRONMENT: PACIFIC FUTURE ENERGY IS COMMITTED TO DOING THINGS THE RIGHT WAY IN NORTHERN B.C. — VANCOUVER SUN

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It’s quite an environmental claim: “The world’s cleanest, greenest, bitumen-to-fuels refinery.”

But this is our commitment at Pacific Future Energy Corporation, as we develop our plans to build this refinery in northwestern B.C.

We will do so through advanced technology and expertise, with the cleanest power, the highest amount of water recycling and treatment, the maximum recovery of CO2, and the smallest environmental footprint.

And we will do so through a serious commitment to “doing the right thing” as we add value, open up badly needed market access for Canada’s oil products, create and preserve jobs and income in Western Canada, protect B.C.’s coastal waters from large crude-oil tankers, while recognizing and respecting First Nations rights and title.

This week, we at Pacific Future Energy submitted our “Project Description” to federal and provincial regulators to start a public conversation about our project. This will begin a review process that could last up to two years.

If approved, construction could begin in 2018 and production in 2021, at a site between Terrace and Kitimat. We will produce primarily diesel, gasoline and jet fuel.

Our task: to earn public support over the next two years for building our economic future and protecting our coast by building this refinery.

Our Principles: One of Pacific Future Energy’s fundamental principles is that First Nations are a first order of government. PFEC recognizes and will respect the new industry standard of placing “First Nations First.” We will proceed with our Project if we are welcomed and supported.

We know that we must gain the free, prior and informed consent from First Nations who are the titleholders affected by this Project. PFEC is in full support of the UN Declaration on the Rights of Indigenous Peoples. This is reflected in PFEC’s commitment to directly engage Indigenous communities, including their families and citizens.

This requires going beyond simply upholding the current legal requirements, to establishing meaningful relationships and in some cases, partnerships with the First Nation governing bodies and their business and administrative bodies.

So why an oil refinery? Aren’t today’s oil prices unbelievably low? And doesn’t the UN Paris conference on climate change mean we are going to phase out fossil fuels? Why, then, is Pacific Future energy banking on a future strong enough to warrant a $14-billion investment in a new oil refinery in B.C.?

The UN Paris conference made it clear that innovative solutions will be required for the world to achieve its goal of limiting temperature change to 1.5 degrees from pre-industrial levels.

We believe that our “Near Zero Net Carbon Emissions” facility will be one of those innovative solutions, given that it will significantly reduce the over-all carbon impact of the upstream feedstock we will be refining.

And the long-range picture is of future demand for our key products, especially in Asia. All serious predictions are that diesel and gasoline will continue for some decades to be the main transportation fuels, as will jet fuel for aircraft. Ours will be a viable business.

The challenges are these: Can we produce cleaner fuels? And can we do so in a much, much cleaner way? We can indeed.

  • We will achieve “Near Zero Net Carbon” emissions status, thanks to new technology.
  • Our refinery will be powered by clean-energy sources that include biomass wood waste from B.C. sawmills.
  • Our diesel and gasoline fuels will meet “Euro VI” standards, fitting all world markets, and cleaner than current government standards in Canada and the U.S.
  • Our refinery will prevent bitumen from being processed in other refineries or locations where greenhouse-gas emissions are considerably higher and environmental standards are lower.
  • It will also produce no coke — meaning a dramatic reduction in emissions from eventual use of that product.

On top of all that, it will protect B.C.’s coast from the risks presented by large tankers carrying diluted bitumen or heavy crude oil. The ships carrying our products to Asia will be smaller, and their cargoes will mean vastly less environmental risk.

We do not require a pipeline. We’ll bring in non-dangerous, near-solid “neatbit” by train. It is stable, essentially inert during transportation, and cannot explode. It is so safe railcars do not have to carry warning signs.

In the end, Industry will not gain market access through British Columbia unless it is prepared to commit to the highest environmental standards. It must also be prepared to commit to the principle that B.C. should receive its “fair share” of fiscal and economic benefits associated with gaining market access. PFEC does not see these as burdens, but as opportunities for everyone.

All these points — and our commitment to “doing the right thing” — add up to the world’s cleanest, greenest oil refinery for British Columbia’s west coast.

Robert Delamar is CEO of Pacific Future Energy.

 

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First Nation takes wait and see approach to northwest B.C. refinery plans — TERRACE HERALD

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A recent proposal for a project to ship refined petroleum products off the North Coast has come out ahead of the game compared to others, says a First Nations leader whose traditional territory takes in the proposed site.

“They seem to have it way more together,” said Kitselas chief councillor Joe Bevan, in comparing the Pacific Future Energy refinery project to previous proposals he’s seen cross his table such as the Kitimat Clean refinery plan and the Enbridge Northern Gateway project which ship unrefined crude offshore.

Like the Kitimat Clean proposed refinery, Pacific Future Energy would be a massive facility to process tar sands bitumen into a refined product and shipped by tanker to Asia from a terminal in Kitimat in what a company press release says would be small tankers.

Both have tagged the provincial Crown land Dubose Flats area between Kitimat and Terrace, which is within Kitselas First Nation traditional territory, as a location.

Each would then have a pipeline network to pump final products to export terminals with the one for Pacific Future being potentially located on Portland Inlet.

And like the Kitimat Clean proposal, Pacific Future Energy plans to forgo both pipeline and traditional petroleum rail transport by moving a very dense form of undiluted bitumen that has the “consistency similar to peanut butter” and thus would be less likely to spread were an accident to happen en route, according to a Pacific Future Energy release.

Pacific Future Energy, whose board of directors includes former federal international trade minister Stockwell Day, is planning a refinery which would produce up to 160,000 barrels a day of diesel, 40,000 barrels a day of gasoline, 13,000 a day of kerosene, and 10,000 a day of liquefied petroleum gas or propane. Butane would also be produced.

The company says it would need 3,500 people for construction and 1,000 for operations.

Pacific Future says the construction could potentially begin in 2018 with a 2021 production start date. It’s valued at approximately $15 billion.

Billed as a green, the oil refinery would also be powered by waste wood generation using local wood products and have tight emissions controls.

Bevan said Pacific Future Energy first approached his First Nation a year ago, and submitted a detailed project proposal just before Christmas which Bevan said will take about a year for his lands and environmental team to review before any decision might be made support the project.

A recent B.C. Supreme Court ruling related to the Enbridge Northern Gateway project, which has been approved by the federal National Energy Board subject to more than 200 conditions, stated the provincial government failed to sufficiently consulted with First Nations through its participation in an environmental review of the project.

“We have been engaging with them for just over six months,” said Bevan of his meetings with Pacific Future Energy. “Right now we are in the midst of that review. Like I always say, let’s just work our way through the review and make our comments and concerns be known.”

As for Kitimat Clean, Bevan said the owner of that company, David Black (who is also the owner of Black Press which publishes The Terrace Standard and other northwestern B.C. newspapers) did not have an adequate project plan for them to review when their support was requested several times over the last few years.

“He was interested in that site as well, but there was a lack of engagement with ourselves and lack of following processes,” said Bevan of the Kitimat Clean plan.

Black is now eyeing another potential location closer to Kitimat which is within Haisla traditional territory.

The two refinery proposals come at a time when the new federal government has begun deliberating on how it would follow through on a 2015 election promise to ban crude oil-carrying tankers from the north coast.

Bevan, who was at a meeting this week in Prince Rupert called by federal transport minister Marc Garneau to discuss how that ban would be put in place, said he’s waiting for details on the shape of the moratorium.

He added that transporting the “neatbit”, which is the term for a dense form of bitumen which would be transported by rail, would be a challenge.

“It’s shipping bitumen by rail. It comes in as a solid and they heat it up and liquefy it and then drop it off, and I am just like wow, I’ve never heard that before…,” said Bevan.

He also questioned the kind of system that would be needed to transport bitumen-laden rail cars on CN’s line south toward the Dubose area.

Kitimat-Stikine regional district director Jessica McCallum Miller, who represents the area containing the proposed refineries, said she would support any decision made by the Kitselas regarding the proposals.

“From my understanding, a lot of residents, myself included, see Canada’s long term prosperity and future enveloped more so in sustainable energy efficiency,” she added.

In a statement released yesterday, Kitimat Clean’s Black said he’s close to filing an environmental description of his multi-billion project with federal and provincial authorities.

Black said the promise by the federal government to ban crude oil tankers from the North Coast “reinforces the advantage of putting in a refinery and keeping oil out of tankers.”

The list of Pacific Future Energy executives includes executive chairman Samer Salameh who is also the chief executive officer of the multi-billion dollar Mexican industrial conglomerate Grupo Salinas.

Also on the list is Shawn Atleo, a former head of the national Assembly of First Nations.

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SUPPORTERS OF PACIFIC FUTURE’S PROPOSED B.C. REFINERY BACK SOLID BITUMEN – Globe and Mail

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Backers of a proposed B.C. refinery want to transport Alberta bitumen in solid form inside tank cars along Canadian National Railway Co.’s existing lines and convert the substance into diesel and gasoline at a site north of Kitimat.

Pacific Future Energy Corp. executives, who are seeking to export refined petroleum products to Asia, say the bitumen will be in a form that resembles peanut butter in a refrigerator. The substance, called “neatbit,” would be ideal to transport by rail and poses much less risk to the environment than diluting the bitumen into molasses-like “dilbit,” the executives say.

“Neatbit is a near-solid that has the consistency of peanut butter and does not flow unless heated,” Pacific Future Energy said in a 120-page project description prepared for the B.C. Environmental Assessment Office and Canadian Environmental Assessment Agency. “It has very low flammability. As a result, it is exempt from Transport Canada’s Transportation of Dangerous Goods Regulations and can be transported safely by rail car.”

Pacific Future Energy has selected an 850-hectare site to construct the $11-billion (U.S.) bitumen refinery, choosing the Dubose Flats industrial site after eliminating options near Prince Rupert. The backers will need to negotiate permission to use the provincial Crown land, midway between Terrace and Kitimat. That land is under the legal jurisdiction of the B.C. government and is part of the traditional aboriginal territory of the Kitselas and Haisla.

Three or four trains, each with 120 railcars filled with neatbit, are anticipated to run daily on CN’s rail lines, according to Pacific Future Energy’s filing to environmental regulators. The Vancouver-based energy company commissioned engineering firm SNC-Lavalin Group Inc. to prepare the report.

The report by SNC-Lavalin said construction is slated to start in 2018 at the Dubose Flats site, 30 kilometres north of Kitimat. About 3,500 construction jobs are forecast over a two-year period, and 1,000 full-time refinery positions.

“The main components of the project will include a new bitumen oil refinery constructed from about 26 modules that will be manufactured and shipped via heavy-lift vessels or barges from Asia,” it said.

The goal is to begin exports as early as 2021, though it would likely take until 2024 to process 200,000 barrels a day of bitumen and achieve full production of diesel, gasoline, jet fuel and butane.

Plans call for huge refinery modules to arrive in Canada via Douglas Channel. But Pacific Future Energy would enlist other firms and First Nations to build two pipelines to an export site along Portland Inlet, roughly 120 kilometres northwest of Kitimat.

“Early third-party studies suggest a marine terminal could be situated along the Portland Inlet, in the event such a development were to secure the support of a host First Nation,” the report said. An estimated $1-billion will be needed to construct the two pipelines and another $1-billion for the Portland Inlet export terminal.

The refinery would incorporate cleaner technology, including using wood-waste biomass to help generate electricity. During the production process, petroleum coke would be eliminated as a byproduct. The goal is to keep emissions of carbon dioxide to a minimum.

Pacific Future Energy’s team includes executive chairman Samer Salameh, chief executive officer Robert Delamar, chief operating officer Jacques Benoît, chief strategy officer Mark Marissen and chief financial officer Jeremy Friesen. Other key figures include former international trade minister Stockwell Day and two prominent aboriginal advisers, Shawn Atleo and Ovide Mercredi.

A-in-Chut Business Group, jointly owned by Mr. Atleo, has formed a joint venture with SNC-Lavalin to become the refinery project’s leading investors.

The regulatory filing comes as Kinder Morgan Canada’s proposed expansion of its Trans Mountain oil pipeline from the Edmonton area to Burnaby faces community and environmental opposition while Enbridge Inc.’s Northern Gateway pipeline proposal remains stalled.

Pacific Future Energy is seeking to gain an edge over rival plans, notably one touted by newspaper publisher David Black, who is hoping to forge ahead with his competing Kitimat Clean refinery venture on the Dubose Flats site. Another proposal, Eagle Spirit Energy, is striving to upgrade bitumen either in Alberta or northeast B.C. before piping the material to the West Coast for export.

Follow Brent Jang on Twitter: @brentcjang

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Pacific Future Energy Corp eyes ‘money left on the table’ for $11-billion refinery project in B.C. – Financial Post

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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.”

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