In BC, the greening of bitumen may not be all that far off. Earlier last month, the Kitimat Clean Refinery took the first step towards seeking environmental assessment from the BC government for a project to refine bitumen.
It will be brought by existing rail infrastructure from Alberta, powered by natural gas, to produce value-added fuels such as gasoline, diesel, some ultra-low sulphur diesel, and jet fuel. A projected timeline hopes to get approval in two years and puts the end of construction in the 2020s, with operations to last at least 50 years.
Kitimat Clean's project description proposes several features tailored for Canadians’ (and regulators’) increased concerns about the environmental impacts of fuels and the risks of transporting them. The project’s promised environmental benefits are premised on the understanding that Asian markets’ demand for fuels will be met, one way or another, and that Canada is in the best position to deliver on this demand and also reduce a variety of emissions associated with oil production.
The project may alleviate some of the bigger fears about fuel transportation, both over land and water. Positioned in contrast to using pipelines for bitumen transport across Canada and to the shipment of diluted bitumen to China by tanker, the project description lauds the relative safety of bringing bitumen by rail to the refining facility and exporting safer-to-ship refined product from there to Asia.
Synthetic crude oil, conventional crude, and diluted bitumen present major challenges to clean-up in any potential spill situation – most British Columbians are particularly anxious about these risks to their coasts. On the other hand, as the Kitimat Clean identifies, gasoline and diesel float and evaporate when spilled on water, and the proponent would only produce and ship these forms.
The major determining factors in the damage potential of an oil spill rest in the fuel’s density, volatility (speed of evaporation), and toxicity. For quickly evaporating fuels like jet fuel or gasoline, a clean-up could be entirely unnecessary in the low likelihood of a spill, says the proponent. In terms of local impact, the proposed project commits to minimal physical disturbances to the nearby environment, in addition to utilizing a closed effluent system to remove the need to discharge into local receiving waters.
Of most interest, Kitimat Clean claims a capacity to produce diesel cleaner than other refineries through lower CO2 emissions when burned. The project eschews the production of “normal refinery by-products like diluent, coke, asphalt, heavy residual oil and Bunker C”, employing an unorthodox, but highly effective, method for processing the residuum of distillation. Unlike coking, which produces highly-polluting high-sulfur coke, the refinery would utilize Fischer Tropsch gasification to transform carbon residue and added natural gas into useable, cleaner diesel fuel.
In parallel, Pacific Future Energy, another clean bitumen refinery planned about 32 km north of Kitimat, released its project description draft in January. Their vision for “the world’s greenest bitumen refinery” pledges a Near Zero Net Carbon facility that would use the best possible technologies to process Canadian bitumen. Both projects’ proposals are similar in principle and even in many details like transportation and the elimination of coke production. Nevertheless, the scope differs slightly, first by geography, then by size. Kitimat Clean’s facility would be larger, said its owner, BC-based newspaper publisher David Black, to the Globe and Mail in January.
If implemented successfully, either or both could mean delivering cleaner burning fuels produced with less emission, less adverse environmental impact, and less overall risk. Best yet, the potential is there for BC to move in on a market where other international producers will vie to meet China’s fuel demands with the products of permissive environmental regulations. This ties neatly into the compelling argument that a refusal to permit projects for fear of emissions in one locale only makes room for worse projects elsewhere to fill that void.
These competing proposals also reflect a changing reality in Canadian energy. On its website, Pacific Future Energy directly addresses a simmering political challenge to many bitumen pipeline proposals: a proposed federally-imposed moratorium on crude oil tankers on the BC coast that could curtail any shipping of piped bitumen. Refined products, just like those planned by both proponents, may avoid the possibility of being legislated out of business. Kitimat Clean’s Mr. Black recently touted the measures his project would take to match government requirements, confident that the proposal would “be set” on the environmental front.
It’s looking more and more like incorporating green qualifications into every step of the project development process, including branding, will become a necessity for energy companies operating or hoping to operate in Canada. There’s no doubt it’s all for the better. Projects like these now have massive incentives to advertise their awareness of fuel sourcing and use done wrong and to promote their ability to do it right, all thanks to Canadian innovation and regulation. Moreover, they must not only bill themselves are forward-thinking, but they must also act on it and convince federal and provincial regulators that they really are equipped to carry through and operate according to the stringent regulatory frameworks in place.
Vital environmental considerations aside, the economic viability of shipping already-refined fuels to China hinges on a political decision. The need for environmental approvals and committed investors would remain, but a move by the feds to actually ban heavy oil tankers on the coast (more than just promising to) would move Kitimat Clean and/or Pacific Future Energy’s refinery proposals that much closer to reality.