B.C. premier proposes publicly funded refinery over pipeline. Is it realistic?

As Premier David Eby continues to reject the idea of a new pipeline to B.C.'s northern coast, he’s now suggesting that building a Canadian refinery would be a better use of taxpayer dollars — but some experts doubt the proposal’s merits.

While Eby dismissed Alberta Premier Danielle Smith’s calls for an expedited pipeline in the wake of U.S. military intervention in Venezuela, he said the conversation should turn toward increasing Canadian refining capabilities.

“If we've got tens of billions of dollars to spend, I think we should spend it on a refinery and we should develop oil products for Canadians and for export, instead of being reliant on American and Chinese refineries to do it for us,” Eby said at a news conference Tuesday.

He said building refining capacity would be better than shipping raw resources out when the Trans Mountain pipeline is still not at capacity.

“I don't understand why, if we're talking about massive public investment into supporting Albertans in this fragile global time, we can't talk about supporting all Canadians with oil and gas products that are made right here at home while we transition.”

B.C. Energy Minister Adrian Dix said such a project would generally be built near oil reserves, which would “imply Alberta,” although he acknowledged there have been proposals for a B.C.-based refinery in the past.

Dix also stressed the premier was responding to suggestions about the potential northern pipeline, which does not have a private backer at this point. He added the provincial government’s focus remains on existing projects, such as LNG and the North Coast Transmission Line.

Adam Pankratz, a lecturer at the University of B.C.’s Sauder School of Business, said a new refinery makes no economic sense.

“Refining in Canada is frequently suggested by politicians because it sounds good politically, but it's not an economically justifiable or feasible idea.”

He said the endeavour would be extremely expensive — in the tens of billions of dollars range — and risky.

“We don’t know what the market is going to be for all of the various products that a refinery might produce.”

Petroleum products have an expiration date, Pankratz said, unlike crude oil.

“Gasoline needs to be sold within a few months, otherwise it goes stale. And so if you're refining it and don't sell it now, you have a worthless product.”

Marg McCuaig-Boyd, a senior adviser for Counsel Public Affairs and former energy minister for the NDP in Alberta, said refineries are very expensive and take a long time to build.