Pacific Future Energy Making Progress On B.C. ‘Green’ Refinery

By Elsie Ross – Oct. 15, 2015 – View Issue

A proposed new “green” refinery on the West Coast of British Columbia to be built with the full partnership of First Nations is on track to file a project description by Dec. 1, 2015, a company official said Wednesday.

Pacific Future Energy Corporation plans to open up Asian markets for Alberta bitumen that will be refined into diesel fuel, Mark Marissen, chief strategy and communications officer, told a Calgary Energy Roundtable.

“We believe that efforts by others have failed or stalled because of a failure to obtain social licence,” he said. “We believe permission must be gained at the concept stage and earned throughout the regulatory process.”

Pacific Future first announced plans for the 200,000 bbl-per-day “near net zero carbon emissions” export refinery in the Prince Rupert area in 2014 (DOB, June 10, 2014).

The main EPC contractor for the project will be engineering firm SNC-Lavalin, which recently made a significant strategic investment in the company through a First Nations joint special purpose vehicle controlled by A-in-Chut Business Group owned by Shawn Atleo, a former national chief for the Assembly of First Nations. “This partnership is a demonstration of national corporate leadership on the part of SNC-Lavalin,” said Marissen.

Opening new markets for Alberta bitumen has been the priority of both the federal and Alberta governments for some time and the Asian market is the only one in the world expected to grow, said Marissen. However, “Crossing the Pacific isn’t the problem — from northwestern British Columbia it’s 13 days to Shanghai and 10 days to Tokyo — it’s crossing British Columbia.”

Most of the efforts so far have focused on building pipelines from Alberta to B.C., such as Enbridge Inc.’s Northern Gateway and Kinder Morgan Canada Inc.’s Trans Mountain expansion. However, these efforts have failed or stalled due to opposition from First Nations or public concerns about shipping bitumen from the B.C. coast, “which is a very serious issue to the people of British Columbia,” he said.

“Our proposed refinery in full partnership with First Nations provides the solution,” said Marissen. The refinery would be built in modules in Asia and assembled in Canada near tidewater, considerably reducing the cost. The company’s strategy has been to obtain social licence support before starting the permitting process.

The refinery will not be pipeline dependent as it is on a rail route. Bitumen would be shipped as neatbit, which the company believes is much safer than dilbit and which also would eliminate the need for diluent return. Challenged on how the company would obtain social licence for shipping a product that would still be at risk of a spill, Marissen said that while he’s not suggesting it is going to be easy, “there are far fewer regulatory requirements.”

Pacific Future believes the refinery will meet the stated policy goals of all levels of government — First Nations, federal, Alberta and B.C. governments and key stakeholders, including business and labour, he said. That also includes the B.C. government’s requirement as one of its five conditions for approving a pipeline that the province “get its fair share from allowing the transport of Alberta crude through B.C. “I don’t know how you’d do that without a refinery,” said Marissen.

Engineering is well underway and Pacific Energy has obtained a third-party validation of its economic model by Deloitte as well as by Aegis Energy Advisors, said Marissen. For the next two years, the company will be working on obtaining the required regulatory permits.

Although Pacific Future can obtain approvals from federal and provincial regulators on technical matters, from an overall political point of view, it will need to have permission from the general public, he said. “This requires us to take the time to build relationships with our First Nations partners; we need to be patient and we need to build relationships with regulators and the community and it’s all based on trust.”

Marissen acknowledged there has been a lot of opposition to projects in B.C., which he said has been significant among First Nations across the province. However, company polling for the past two years is showing that about 50 per cent of residents “think it’s okay” to build a refinery while about 34 per cent are opposed. People support a refinery because refining in Canada means that Canadians will get more benefits in the form of jobs and tax revenues and in Pacific Future’s case because the refinery will have the lowest carbon emissions in the world, he said.

SNC-Lavalin is currently working on the “near net zero carbon emissions” technology, said Marissen. “Suffice to say we will be the newest refinery, which helps tremendously with that,” he said.

“We are not suggesting that the refinery will be entirely green but we are suggesting that we can do this in a better way than has ever been done in Canada and the world and create a new benchmark for how refineries are built.”

Supporters also believe a refinery in Canada will have higher environmental and labour standards and will enable Canada to take environmental responsibility for the processing of its oil. “But they don’t see any difference between crude oil and bitumen and they see it as very dangerous to the aquatic environment.” Refined fuels are seen as less dangerous and propane and LNG a lot less dangerous but the company will need to spend time to help people understand the company’s strategy, said Marissen.

Responding to a question from a Roundtable participant, Marissen said the company’s goal is not to seek subsidies for the refinery. “At the end of the day when we want to get that support from the key decision makers in government, we want to be able to come to them with a project that does not require subsidies and that has the full support of First Nations.”