The interesting dialogue between David Black of Kitimat Clean and Greg Stringham of CAPP appears to avoid a major problem with the current design.
Building or not building a refinery in Kitimat does not eliminate the fact that for every three barrels of oil pumped to Kitimat one barrel would be pumped back to Alberta.
I am not sure why but this “coal to Newcastle “ design gets very little press, yet the consequences are dramatic.
If Mr. Black would build an upgrader in Alberta the cost would be much lower than the refinery in Kitimat and the advantages would be almost as great or perhaps greater.
The two biggest savings would be the reduction in pipelines required from two to one and the saving in the energy required to pump the oil (diluent) from Kitimat to Alberta.
This energy savings would represent a 300 kilotonne reduction in GHG emissions per year based on the electrical energy being produced with natural gas.
To put these emissions in perspective, they are about 10 per cent of the reduction that the B.C. government has committed to by 2020.
If the project proceeds as planned then B.C. would have to look to find another 300 kilotonnes of GHG offsets.
Although an upgrader would not prove as large a jobs creator as the refinery, it would still create thousands of construction jobs and hundreds of permanent maintenance and operating positions.
It would also be a consumer of natural gas and much of it could come from northeast B.C.
The amount of gas converted in the process would be similar to a small LNG plant without the energy cost of liquefaction.
It is surprising that the Alberta, B.C. and Canadian governments have not pursued this alternate design, as they have been giving lip service to how much effort they are putting into GHG reductions.
The CAPPtains of industry could be forgiven as their objective is to maximize income but it is hard to understand the unnatural economics of this project from the helicopter view.