A world class Canadian refinery should have been built once tar sands crude met supply
To the Expositor:
The Gasbuddy graph included shows that both the Ontario and Canadian retail gasoline markets are just as competitive as US markets, as our prices closely follow the ups and downs of the US retail gasoline prices. The price in Canada is the same as the price in the USA, plus the exchange rate, plus the higher Canadian taxes, plus a penny or two for transportation.
Being at the end of the road, Manitoulin must pay a premium, as our gasoline must come from Winnipeg, Sault St. Marie USA, Montreal, Toronto, or Sarnia. Lots of transportation, low sales volume, and low competition for Manitoulin’s wholesale gasoline business takes its toll on our Haweater wallets.
The tragedy is that the Canadian and provincial governments are still promoting, encouraging, subsidizing, and funding 30 or so tar sands expansion projects to dig up even more heavy oil at great expense; both financial and environmental.
Western Canada Select (WCS) heavy blend crude for February delivery in Hardisty, Alberta, last traded at US$13.25 per barrel, the lowest since the WCS benchmark was introduced in 2004, while West Texas Intermediate Crude was trading at US$27 a barrel. Today, at a 51 percent discount from US crude, Canada gets less for its heavy oil than the ISIS Islamic terrorist organization receives for their stolen, illegal, terrorist funding oil they sell on the black market so as to fund their operations.
Canada is not self-sufficient for gasoline, diesel, or heating oil with our current refinery production capacity. For many decades now, Canada must import our shortfall of these basic commodities from the US, Europe, Russia, etc. When exchange rates become unfavourable, we suffer even more, just like today. In addition, as long as we sell our crude oil birthright as WCS crude, we lose the jobs and additional income we could have had if we had upgraded it to gasoline, diesel, furnace oil, and other high value products.
The folly of our Canadian governments was to allow the tar sands to get out of step with the downstream processing capacity.
What should have happened was the development of tar sands and its crude oil exports until Canada was producing enough surplus crude to supply an additional world class refinery. At that point, our government priority should have shifted to building that world-class refinery, and no additional tar sands would be approved until that additional Canadian refinery was built. After that, additional tar sands development could be done if private interests chose to do so, and could obtain regular government approvals.
When our governments come to their senses, perhaps they will see the wisdom of this approach. Unfortunately, it can take 20 years to plan, design, approve, and construct a world-class refinery.
Until then, we Canadians are stuck, especially Manitoulin.
Glenn Black
Process Quality Associates Inc.
Providence Bay
