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Higher gas prices from Burnaby refinery closure doubted

The Chevron refinery in Burnaby is the last petroleum refinery in Metro Vancouver.  - bing.com
The Chevron refinery in Burnaby is the last petroleum refinery in Metro Vancouver.
— image credit: bing.com

Not all local mayors agree the loss of the Chevron refinery in Burnaby would bring more pain at the pumps for Lower Mainland drivers.

West Vancouver Mayor Michael Smith, who has a business background as a petroleum distributor, disputes suggestions that the refinery, if closed, could force gas prices up sharply in the region because of the reduced local supply.

It's the last remaining refinery in the region and it's become entangled in the debate over the proposed Trans Mountain pipeline expansion, with critics warning the push to export more crude oil to Asia threatens to starve the plant of its supply.

Smith doesn't accept suggestions the loss of the refinery would lead to Canadian crude being shipped to China, refined there and then imported back.

"It makes no sense," he said, pointing to more efficient U.S. refineries just across the border in Washington state that get crude by tanker from Alaska and could easily serve the B.C. market.

"There are three refineries 50 miles from the border with 10 times the capacity of the Chevron refinery," Smith said. "It's a hell of a lot cheaper."

He told Metro Vancouver's regional planning committee Friday he expects Chevron will eventually close the aging Burnaby refinery, but simply as a result of unfavourable economics.

Smith also noted most B.C. gas and diesel now comes not from the Chevron refinery but down Kinder Morgan's Trans Mountain pipeline from Alberta refineries.

Closure of Chevron in Burnaby would mean pipeline capacity that now carries its crude could instead deliver more refined petroleum to the region, he added.

His comments came as Burnaby Mayor Derek Corrigan prepares to appear at a National Energy Board hearing in Calgary next month in support of an application by Chevron for a guaranteed, secure supply of crude through Kinder Morgan's Trans Mountain pipeline. The refinery has recently resorted to trucking in some oil because it has been unable to outbid other users for access to the over-subscribed pipeline.

Opposing Chevron at the NEB hearing is at least one of the Washington refineries that could profit from its demise.

Corrigan said he still suspects China – with much weaker environmental rules – might be able to refine oil so cheaply it can still be shipped back to B.C. competitively.

He denied he's out to protect local jobs in his city, adding the issue to him is the ability to refine in Canada – even if Smith is right that gas would come from the U.S.

"To be producing oil and not being able to refine it seems ridiculous," Corrigan said.

"If we end up in a situation where we have no refining capacity at all in a city of two and a half million people and we're dependent entirely on the American system to provide us with oil, I think that's a real issue for our autonomy."

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