Calgary Branch Luncheon: Refining Bitumen in Alberta - Redwater Refinery
11:15 am - 1:00 pm
Register by November 18, 2018
A question is often asked, which we will address: why can't Alberta have more refineries?
Since 2006, the government of Alberta has tried to increase the volume of raw bitumen upgraded and refined in the province of Alberta. The stated objectives were to diversify the economy, enhance the value of Alberta's resources and create employment. Notwithstanding these laudable objectives, in the last 30 years only one refinery has been built in Alberta to refine bitumen – the North West Redwater Sturgeon Refinery located near Edmonton.
The short answer to this question is that the high capital cost of building any industrial facility in Alberta makes the economics of an Alberta bitumen refinery challenging. Currently, almost half of bitumen produced in Alberta is upgraded into synthetic crude oil for use as feedstock in conventional refineries in Edmonton, Vancouver, eastern Canada or the United States. The remaining raw bitumen is mostly exported to the United States with a small amount to Asia, where it is used as a feedstock for refineries that have invested in special equipment to refine bitumen into petroleum products. This investment in special equipment was an add-on to existing and much larger refineries (brownfield), as opposed a brand new refinery (greenfield). As a result, the capital cost for these brownfield investments were significantly lower, and therefore the economic were significantly better.
In order to deal with the poorer economics caused by higher capital costs, the Alberta government agreed to pay a tolling fee to the Sturgeon Refinery for a period of 30 years. The presentation will describe the economics of this arrangement.
About the Presenter
Brian Livingston is an Executive Fellow with the School of Public Policy at the University of Calgary. He has a B. Sc. in Mechanical Engineering from Queen's University and a J.D. from the University of Toronto Law School. He spent 30 years of his working career in the oil and gas business in Calgary, Toronto and Dallas. His time was spent in a variety of different capacities, namely project work, financial and economic analysis, dealing with contracts and dealing with governments.
He is a past president of the Calgary Petroleum Club.
He has recently published a paper for the School of Public Policy entitled "The North West Redwater Sturgeon Refinery: What are the Numbers for Alberta's Investment?" Earlier in 2018, he published a paper entitled "The Alberta Electrical Grid: What to Expect in the Next Few Years".
133 9 Ave SW
Calgary, AB T2P 2M3
November 22, 2018
11:15 a.m. to 1:00 p.m.
Registration: 11:15 a.m.
Lunch: 11:45 a.m.
Presentation: 12:15 p.m.
School of Public Policy
University of Calgary
APEGA Student Advantage Program: $15
November 18, 2018