Why Rachel Notley’s refinery pitch won’t solve the oilpatch’s problem


Considering the recent oil price crash in Western Canada and the fact a provincial election is expected in the spring, the Alberta government is trying to pull out all the stops to lift the oilpatch out of the doldrums​.

Buying railway oil tank cars, subsidizing petrochemical plants and mandating oil production cuts are some of the NDP’s moves to spur activity in the industry or to increase oil prices.

Those moves have all received relatively strong support. 

But the government’s latest announcement aimed at aiding the industry, to look at building a new refinery in Alberta, is being met with significant skepticism. 

The Alberta government is issuing a request for expressions of interest from the private sector to build a refinery in the province that would use oil extracted here.

Experts say Alberta already has more refinery capacity than it needs and the biggest problem facing the province’s oilpatch remains unsolved — a lack of export pipeline space.

« It sounds, if I may be so blunt, like a little bit of desperation, » said Roger McKnight, chief petroleum analyst with En-Pro International.

« What is the market? Where is it going? How does it get out of the country? »

The only refinery to be built in Alberta in the past 30 years was the North West Sturgeon Upgrader, north of Edmonton, which was constructed with help from the Alberta government. The refinery’s price tag swelled from an estimate of $5.7 billion in 2013 to $9.5 billion. The facility has also faced criticism for only processing up to 50,000 barrels per day and only producing diesel, of which there is already ample supply in the province.

« It’s hard to be polite here. That’s an awful lot of money for very little return, » McKnight said. « I think it was a bit of a mistake. »

The Alberta government argues a new refinery would create jobs and create more wealth for the province by exporting a higher-value product. The Sturgeon refinery employed 8,000 people during construction and will employ around 400 full-time workers when it ramps up to full capacity.

The last refinery to be built in Alberta was the North West Sturgeon Upgrader, which was over-budget and delayed. It’s not yet operating at full capacity. (CBC)

Ian MacGregor, chairman of North West Refining, which is part-owner of the Sturgeon facility, says more refineries is exactly what Alberta needs. 

« I believe that refining is the future, » he said. « What we have to start doing is we got to quit selling raw material. We’ve got to sell finished goods. »

Constructing a refinery would likely take between five and 10 years, according to experts. Alberta has five refineries with a total capacity of more than 475,000 barrels per day. The province has the largest refining capacity in the country, amounting to about 25 per cent of Canada’s total processing volume.

Calgary-based petroleum industry analyst Michael Ervin doesn’t expect there will be much interest from industry to build a new refinery in Alberta without a sizeable subsidy.

« I doubt that the private sector will really see a business case for this unless the Alberta government was willing to ante up close to the entire cost of building a refinery, » said Ervin, who estimates the cost of constructing a typical refinery at around $15 billion.

Considering the long-term trend of more electric vehicles on the road, Ervin said the business case for a new refinery « just doesn’t seem to be there. »

‘A wish and a dream’

Duane Bratt, a political scientist at Mount Royal University in Calgary, sees Tuesday’s announcement as pre-election rhetoric, much different from more recent actions targeting Alberta’s oil price woes.

« Whether that’s convincing the feds to buy Trans Mountain, or announcing the rail car purchase, or the curtailment of oil production — those are actually concrete things that have happened, » Bratt said. « [The refinery] is just a wish and a dream. »

The NDP has long favoured constructing more refineries in the province and did campaign on the issue during the last election.

If you were looking at investments you could make as a government in industries that are labour intensive, refining would be way at the bottom of that list.– Andrew Leach, University of Alberta

Submissions from the private sector will be accepted until Feb. 8. Depending on interest, the government may issue a formal request for proposals.

Refineries are often built near high-demand centres and also where labour and construction costs are relatively low, such as in parts of the U.S. and overseas.

University of Alberta economist Andrew Leach said there aren’t many details about how committed the government is to seeing a refinery built, or how the proposals would be evaluated.

« So, first pass, certainly nervous about it and not enough detail yet to tell you exactly why, » Leach said of the announcement.

Not enough jobs 

But if one of the big arguments for building the facility is jobs, that’s not enough, Leach said.

« If you were looking at investments you could make as a government in industries that are labour intensive, refining would be way at the bottom of that list, » Leach said.

Why Rachel Notley’s Alberta NDP is still considering building an oil refinery

Leach said there’s also the economic question of whether the financial return from refining is worth it.

« And the distinction there is, are we creating a product that’s more expensive enough to justify all of the labour and capital we’d have to put in to do it?

« And for the most part, in Alberta, the answer has been ‘no’ for a lot of the previous decades, which is why the commercial interest isn’t there. »


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Number of injured from Irving refinery explosion higher than initial reports


The number of workers injured in the explosion and fire at the Irving Oil refinery in Saint John on Monday is higher than the four initially reported.

Family doctor Mike Simon says he treated five workers that day alone, including two who were thrown by the blast.

He expected to see at least six more injured by the explosion or fallout by the end of the day Wednesday.

And there could be many more with psychological scars, Simon said.

« It’s almost like you’re being in a war zone, right? Because suddenly, the explosion, a lot of guys are running for their life.

« It’s extremely scary ’cause you’re in a situation, you don’t know what’s going to happen. Big bang, the force knocking you over, you know, blowing your … hard hat off your head, blowing your desk around, throwing you off a chair. You know, it’s significant. So these are real-life events. »

Irving Oil and Saint John Emergency Measures Organization officials have said four workers were treated at the Saint John Regional Hospital for minor injuries after the 10:15 a.m. blast that sent flames shooting an estimated 30 metres high and left a plume of black smoke billowing over the city’s east side for hours.

The Horizon Health Network has said the hospital treated five people for non-life-threatening injuries that day, but declined to elaborate, citing patient confidentiality.

The flames and plume of black smoke towered over the stacks at the Irving Oil refinery in Saint John Monday morning. (Submitted by Doug McLean)

Officials have not provided any updates on injured workers since Tuesday, but WorksafeNB’s assistant director of investigations suggested Wednesday « the number seems to be growing. »

Eric Brideau, who visiting the site Tuesday and met with employees, said he could not confirm the total number of workers injured.

The cause of the explosion has not yet been determined, but officials believe it stemmed from a malfunction in the unit that removes sulphur from diesel.

Brideau described the investigation as « technical and complex. » He expects it will take two to three months to complete.

The Irving Oil refinery is the largest in Canada. It employs about 1,400 people and is capable of producing more than 320,000 barrels per day at the sprawling site, which covers more than 300 hectares.

Close to 3,000 people were working at the time of the holiday Thanksgiving explosion because of a massive turnaround maintenance project that’s underway. About 100 of them were the normal operations crew, while the rest were contracted tradespeople from across New Brunswick and other provinces.

Variety of injuries

Simon, who’s the go-to doctor for some of the contractor companies, says they called him about an hour after the fiery explosion, asking him to open his office in the city’s north end for incoming patients.

« There was a fellow [who] hurt his ear because the blast sort of hit him on the side. There was a guy who was blown off a ladder and twisted his ankle.

« There was a guy, who again, was blown off his desk, and fell into a railing and he had some contusions, injuries on his arm.

« Another guy, a little bit of inhalation injury because of the smoke and the dust and stuff from the explosion, he was very close to the blast. And he hurt his shoulder as well. Mostly musculoskeletal things like that. »

Boilermaker Terry MacEachern was rattled by Monday’s blast at Irving Oil facility, but is ready to return to the job. 1:31

Simon said treating less serious injuries at his office helped free up the emergency room to deal with anything more serious that came up and saved the workers from facing long waits.

The Saint John Regional Hospital went into « code orange » after the explosion was reported, meaning it was prepared for a possible mass casualties influx.

« They plan for these events well in advance » and run mock drills, said Simon, who has worked in the emergency room over the years.

There are protocols about calling in extra doctors and nurses, if necessary, as well as administrative and janitorial staff, and surgical specialists would be on-call, he said.

It takes a while for that shock to sort of percolate through somebody.– Mike Simon, family doctor

Trauma rooms would be prepped, patients discharged to clear beds, and medications readily available.

« So you’re going to get the best care available in the 21st century. »

Simon said it could take a few days for workers to even realize they’re injured after such a traumatic incident.

« It happens so quick. And it’s shock effect. And so it takes a while for that shock to sort of percolate through somebody. »

As their experience sinks in, some might find they’re having nightmares or struggling with worries, he said, calling it « normal human nature. »

« You get hit in the arm, you get a contusion or a cut, that’s the way the arm heals. You get a shock value like this, it takes a while for your brain to bounce back too. » 

He encourages the affected workers to seek counselling or at least find someone they can talk to as they work their way through any issues.

With files from Rachel Cave


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Situation stabilized at Saint John oil refinery following explosion, fire


Eight hours after an explosion and fire at the Irving Oil refinery in Saint John shook the city and sent several contractors to hospital with non-life threatening injuries, the situation has been stabilized, Emergency Measures Organization officials say.

But flare-ups are still possible, as part of the normal stabilization process, the organization posted on Twitter shortly after 7 p.m. AT.

« Crews are on site and monitoring, » it said.

Area residents are no longer being urged to remain in their homes. The New Brunswick Department of Environment and Department of Health are monitoring air quality around the east-side refinery and « have not identified any concerns to public health, » said EMO.

The Saint John Fire Department has begun releasing some of its crews and equipment from the site and all streets have reopened to traffic.

A  malfunction in a diesel-treating unit is believed to be the source of the « bed-shaking » blast that sent flames shooting an estimated 30 metres high and saw a plume of black smoke cover most of the city’s east side shortly after 10 a.m.

The unit, which removes sulphur from diesel, has been isolated and the rest of the refinery has been shut down « out of an abundance of caution, » said Irving Oil’s chief refining and supply officer Kevin Scott.

Irving Oil says a « major incident » has occurred at its Saint John refinery, after reports of an explosion and fire on Monday morning. 0:32

The Irving Oil facility is the largest refinery in Canada. It employs about 1,400 people and is capable of producing more than 320,000 barrels per day.

Although it’s Thanksgiving Monday, close to 3,000 people were working onsite due to a regularly scheduled maintenance project. About 100 were the normal operations crew, while the rest were tradespeople working on the turnaround project, officials said.

« The fact no one was hurt seriously or killed during this incident is something to be very thankful for, » said Saint John Mayor Don Darling.

‘I thought I was dead for sure’

Jonathan Wright, an electronic technician from Florida who was working inside the refinery during the fiery explosion, said he thought he was going die.

« We got blasted to the ground. Everything blew up and I didn’t know what to do, » he said. « You couldn`t see nothing but flame. »

Contractor Jonathan Wright, who escaped the refinery fire, said he heard a high pitch hiss for three or four seconds before the explosion. (CBC)

Wright knew he had to get out, but the heat from the fire kept him from the stairway down and he says there were no ladders.

« Basically I was swinging through scaffold poles and walking across pipes and everything to get out of there, it was terrible. I didn’t want to get burned. »

He hurt his hand, elbow and foot, but considers himself lucky. « I thought I was dead for sure, like guaranteed dead. »

After the blast at the Saint John oil refinery Monday morning, police were warning residents to stay clear of the area. (Photo: Submitted)

Irving Oil is working with WorkSafeNB, the Department of Environment and EMO officials to « understand what happened » and determine next steps, said Scott.

It’s too soon to say how long the shutdown will continue, but the company hopes to avoid any interruptions to service, he said.

« We’re working through all of our contingency plans in terms of supply. Of course we have finished product in tankage at the refinery and then further out in the system in marine terminals and you know relationships with other suppliers as well that we will draw on to minimize the impact on any of our customers — in Canada or the U.S. »

Saint John police responded to the refinery at 10:16 a.m., and were asking people to avoid the area as curious onlookers lined the streets, hoping to catch a glimpse of what was going on.

Several streets were closed but no evacuations were ordered.

After the explosion was reported, the Saint John Regional Hospital went into « code orange, » meaning it was prepared for a possible influx of patients. 

« We can confirm we have now treated five people with injuries from the refinery explosion at Horizon’s Saint John Regional Hospital and all five have been discharged., » New Brunswick’s Horizon Health Network said on Twitter shortly after 3 p.m.

EMO was reporting four people were treated in hospital for « minor injuries. »

Irving Oil posted on Twitter around 2 p.m. that several contractors were being treated for non-life threatening injuries.

« We now understand that all employees and contractors working on site have been safely accounted for, » the tweet said.

« As this is an active situation, we will be sharing more information as it becomes available. »

No other updates have been posted.

Residents react to explosion

Shaun Watson, who lives on the east side of Saint John, says he felt shaken up by the explosion and fire. (CBC)

Darling said on Twitter early after reports of the explosion emerged: « This is obviously a live event … when we know more, you’ll know more. Praying for the safety of all involved. »

Premier Brian Gallant tweeted he has reached out to the mayor.

Gallant said the New Brunswick Emergency Measures Organization was engaging with the city and Irving Oil officials to assess the situation.

« On behalf of all New Brunswickers, our thoughts are with the workers affected and with the community of Saint John, » Gallant said.

The oil refinery in Saint John. (CBC)

Bob McVicar, who lives in the area of the explosion, posted on Facebook that it felt like a « bed-shaking explosion. »

Area resident Shaun Watson was in his house when he heard a boom.

« The whole house shook, » he said.

Residents across the city also reported on social media that they felt the effects. 

Not the first explosion

Mark Melanson and Jocelyn Legassie were sitting at the Tim Hortons on Hickey Road, about three kilometres away from the refinery, when they heard a popping sound.

They looked outside the window and saw black smoke and flames exceeding the height of the stacks at the refinery.

Officials have said they believe a malfunction in the diesel-treating unit caused the fiery explosion. (Photo: CBC)

Melanson said he has seen explosions like this on YouTube at oil refineries around the world, but never seen anything like this in Saint John.

Legassie agreed, saying: « I’ve lived in Saint John for 30 years and this is the first time I’ve seen something like this happen here. »

There was another explosion at the oil refinery in 1998, when flames and a huge cloud of black smoke hung over the facility.

Rob Beebe felt Monday’s explosion from his apartment on Martha Avenue, a few streets over from the refinery.

« We felt the entire building move as if it wobbled. »

When he walked outside, he noticed black smoke coming from the refinery, so he hopped into the car, drove down the corner and saw fire about 30 metres high.


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