The future of Burnaby's Chevron refinery could be in peril from a burgeoning demand for Canadian crude in Asia.
"Concern is that the refinery may scale back its operations and that there's not a steady supply of oil," said Russ Day, from the union local representing the refinery workers. "Eventually, Chevron may deem the refinery a non-viable asset and turn it into a terminal."
Burnaby's Chevron refinery gets oil from Kinder Morgan's Trans Mountain pipeline, which ships petroleum products from Alberta to Burnaby. Kinder Morgan also runs the Westridge Marine Terminal, where tankers fill up with oil for overseas markets.
Chevron spokesperson Ray Lord said there wouldn't be job cutbacks at the refinery, but he was not able to comment on reduced operations.
"We don't comment routinely on our operating capacity, that's all commercially sensitive information," he said. "We never comment on that."
Kinder Morgan's pipeline has been "oversubscribed," meaning demand for oil outstrips the pipeline's daily maximum capacity of 300,000 barrels, and Chevron has been struggling to get its share of the oil.
Day expects that by March, Chevron will not be able to get enough oil to run the plant continuously.
"We'll have to take rotating outages," he said. "They'd have to shut the refinery down until there's enough oil to run it."
Burnaby-Douglas MP Kennedy Stewart told the NOW he's been in contact with refinery workers and that Chevron has had a tough time competing with offshore companies for access to the pipeline's oil and has had to reduce operations as a result.
"It looks like this refinery may be in danger of closing," Stewart said. "If, for example, Kinder Morgan twins the pipeline, it means that the way the oil is sold, basically Chevron will not be able to compete with the offshore investors. It's kind of a paradox. We'll be moving more oil along the West Coast, but because of that, we'll be attracting outside investors, and they will outbid our local investors."
According to Stewart, if the refinery doesn't run at a certain capacity then it is not financially viable and operations could be suspended.
"It doesn't have to be that it's all the oil that's cut off, but if it's a certain proportion that's cut off, a critical mass they have to refine in order to be profitable, if it drops below that level, they shut it," he said.
"We've had refineries shutting right across Canada for basically the same reason."
Stewart, NDP associate critic for natural resources in Western Canada, said Canada has been losing one refinery a year since 1980.
"We're in this absurd position where we export our crude oil and buy it back as gasoline," he said.
Stewart said Chinese refineries are state-owned and subsidized and it would be difficult for Canada to compete.
"It's not exactly an even playing field," he said.
There are 250 employees at the Burnaby refinery, which is one of two left in the province.
Lord said at no point has there been any discussion or consideration of the refinery being closed or shutdown.
"We are considering all available options to ensure the ongoing, cost-effective provision of crude feedstock to the refinery in order to maintain a viable, ongoing business here in B.C.," he said. "Our long-term interest is to continue reliably supplying fuel to our retail customers, B.C.'s public transportation infrastructure and industrial/commercial sectors at competitive prices."
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