Never ceases to amaze just how many dummies are out there. The same idiots would also agree that the economy of BC will improve with Dix, a true leftie, as premier

You are absolutely right birdman. There sure are a lot of dummies out there that want that pipeline. As far as the economy and the NDP go they have a track record like Enbridge. But what does that have to do with the pipeline?

And the BC Liberals track record is stellar?

Well, I am someone that wants the pipeline…it’s all about jobs & the economy & Enbridge will do both. There are risks with everything & I’m willing to take them.

Well, I am someone that wants the pipeline…it’s all about jobs & the economy & Enbridge will do both. There are risks with everything & I’m willing to take them.
==========================================

This pipelinje will provide very few jobsfor those here in BC. Its all specialized work and will go to those already in the industry.

And given Enbridges record its far to risky to proceed with this project.

And as for dummies there are lots out there that believe otherwise.
Cheers

NDP supporters don’t favour the pipeline. Tell us something we don’t know.

retired: “Its all specialized work and will go to those already in the industry.”

aka “Canadians”.

Any one who supports this pipeline has not looked at the economics of it, let alone care about the environment. From purely a financial point of view-
1- A spill similar to BP’s in the Gulf Of Mexico ($40 billion and counting), would cost more than the entire value of Enbridge. The taxpayers would be left holding the bag, along with all the fishing and tourism jobs in the areas affected. Enbridge has proposed a $2 billion insurance policy.
2- Besides temporary construction jobs,very few permanent jobs would be created.
3- BC would be far better served by speeding up construction of any one of the six proposed natural gas pipelines to the coast. It would allow for a 500% increase in price for BC gas (and 1000% increase in royalties) over the price we are shipping gas to Alberta right now.

Enbridge reminds me of a used car salesman. They will tell you ANYTHING they think may help you decide to buy from them, or a politician in a run for office. EVERYTHING they say is highly suspect. Looking for truth from one of these people is truly like looking for a needle in a haystack or a particular seed in a big pile of horses**t.

We have seen what they claim on even their own website and then their legal wrangling to show that they aren’t responsible for what they claim to be, afterall. Most of us who are interested enough to look into their record of cleanups from spills (which THEY created through neglect of THEIR OWN pipielines), can see the kind of work they do. Its mostly cover ups and lots of publicity on how the problems have been taken care of, which again is an outright lie.

The people who own the land polluted, ie. the citizens of the country, are left holding the bag. There is NO reason to expect anything different from them operating in this beautiful land.

mythought wrote: “There are risks with everything & I’m willing to take them.”

And tell me, exactly what risks are YOU taking? Sounds to me that you will be benfitting from the jobs. Perhaps not, and I really do not care.

What I care about is that the BC jobs are short lived, are mostly to the benefit of people outside of BC over the construction period either because they are providing the equipment, the pipeline materials, the camps, the energy, etc.

These are the most basic of raw materials being exported, the equivalent of exporting logs rather than lumber, or building panels, or windows, doors and other finished trim or the higher end of added value to wood, good quality furniture.

VERY, VERY short sighted.

JB wrote … “aka “Canadians”.

You seem to have little knowledge of that little change that has been occuring over the last decade or so.

http://www.vfw.org/News-and-Events/Articles/2012-Articles/CANADA-WANTS-U-S-VETERANS-FOR-PIPELINE-WORK

CANADA WANTS U.S.VETERANS FOR PIPELINE WORK

The Veterans of Foreign Wars of the U.S. is proud to announce that its partly owned veterans jobs board has secured an exclusive employment initiative with Alberta, Canada, that could see thousands of U.S. veterans heading north to work on their oil pipeline.

Though America’s Keystone Pipeline is delayed, the Canadians are moving forward on their side of the border and have an immediate need for tens of thousands of workers,” said Daywalt, whose website averages more than 55,000 daily job postings by employers strictly interested in hiring veterans. He said the Edmonton Economic Development Corporation anticipates a shortage of 114,000 workers in the Alberta area, and they want to hire American veterans to fill that shortage.

According to the development corporation, the positions being offered are long term, with many paying as much as 30 percent more than similar industry positions in the United States. Some positions will require a move to Canada, but many others will allow veterans to commute — working several weeks in Canada, then one week back home.
————————————

Enbridge will not be far behind …. here are already tons of foreign worers in the oils aands area …

Your slip is showing very prominently JB. Get a bit more in tune with what is happening around you.

Y’all realize dat dis aint the first pipeline in BC, right?

Clickty, Clack,
The oil products will travel down the CN track.

Gus, I’m not sure where your googled article says that no Canadians will be hired. I have said in other threads that worker shortages are a reality in many industries and the trend is only going to continue.

Come down from your high horse.

Northern Gateway will have a couple of firsts.First diluted bitumen pipeline in BC. First time supertankers will attempt to navigate into Kitimat.

“Clickty, Clack,
The oil products will travel down the CN track.”

To transport the 840,000 barrels/day Northern Gateway wants to eventually transport, would require 14,000 railway tanker cars/day. Dream on!

Natural Resources Committee Meeting
On January 31 2012 excerpt

Mark Corey Assistant Deputy Minister, Energy Sector, Department of Natural Resources

Thank you, Mr. Chair.

I think that we have distributed our presentation document. The purpose of my presentation is to give you an overview of the petroleum refining industry. I will begin by describing the refining process as such. Then, I will provide the committee with an overview of the Canadian petroleum refining industry. Finally, I will talk about the factors affecting investment in the refinery sector.

Again, I’m just going to go through the deck here.

On the slide where we talk about what refining actually is, this is very much an oversimplification, but refining is basically just boiling crude oil. If you look at the slide, you can see that what it’s actually doing is adjusting and reshaping the hydrocarbon molecules, standardizing the product, and removing contaminants. That’s an oversimplification, but that in a nutshell is what refining does. Crude oil is boiled, the vapour is condensed in a tall distillation column, and different components are drawn off as they condense separately at each level in the column at different temperatures. You can see, for example, that gasoline comes out at the top, and lubricating oil, paraffin wax, and asphalt, the heavier ones, come out at the bottom. You have other products in between.

Now, that’s a real oversimplification, but that’s essentially what refining is. Again, I’d let Peter Boag from CPPI probably go into more of the technicalities of it, as that’s the industry side of things.

The next slide is just to show that the amount of different products that can come out of a barrel of crude oil can vary. That’s one of the things that refineries do through various processes. They can get more or less gasoline and more or less diesel, for example, out of a barrel of crude depending on how it’s refined.

Conversion is required. The processes use high temperatures and chemical reactions to separate products by changing their chemical structure. This involves removing impurities such as sulphur and nitrogen to meet regulatory and seasonal requirements.

Refineries get more complex and expensive to build and operate based on the heaviness of crude they handle. Again, refineries that are processing crude oil are bigger and more expensive than ones that produce light crude.

Each refinery is often of a different design, based on the existing technologies and anticipated market needs at the time of construction. They adapt to the marketplace. For example, North American refineries tend to be set up to produce more gasoline and less diesel because we have more need for gasoline. European refineries do it the other way. They actually are set up to produce more diesel and less gasoline.

So that’s what refineries do. They can actually vary the amount of different products that come out, depending on how they’re processed.

The next slide is just to show that even though North America is an integrated market, Canada really gets its crude from two different sources. Western Canadian refineries use domestic crude, and western Canada supplies the majority of crude used by Canadian refineries that’s transported all the way from southern Ontario, Sarnia, to Vancouver. Specifically, refineries in Ontario use largely now domestic crude—approximately 85% Canadian crude in 2011—but still bring in some imported crude from the east coast. The imported crude, the other 15% coming in, is from North Dakota, 4%; and Norway, Angola, and Equatorial Guinea make up about 11%.

In terms of refined products, product is moved from the refineries to supply terminals through a variety of modes, including pipelines, trains, tanker trucks, and tanker ships in the east. Western refineries supply all product demand from Vancouver to Thunder Bay and the territories. In addition to supplying local markets, refineries in southern Ontario also move product to Sault Ste. Marie in northern Ontario.

If you go to the next slide, you can see that in eastern Canada it’s different. In eastern Canada, crude oil comes either from the Canadian offshore off Newfoundland, which is 15%, or imported, which is 85% via tanker into Halifax, Saint John, or Come By Chance from countries such as Algeria, Nigeria, the United Kingdom—that’s from the North Sea—and Norway.

In Quebec, crude is imported via smaller tankers into Lévis or by larger tankers into Portland, Maine, and then via the Montreal-Portland pipeline into Montreal. Again, for Montreal there is a pipeline. I think the capacity is that about 600,000 barrels a day come in from Maine and go to Montreal.

An indication of the refinery sector’s competitiveness is the fact that today Canada is a net exporter of refined products. In 2010 we imported 223,000 barrels per day of refined product, mostly into Quebec and Atlantic Canada, while at the same time we exported 419,000 barrels per day of refined product, largely into the New England states. Again, this is the phenomenon where some of the refineries in eastern Canada will import crude, process it, and ship it on into markets in New England.

Petroleum products come from two of three Atlantic refineries that supply local markets but also find their way to the Arctic and Hudson Bay regions as well as the eastern seaboard, which is what I just mentioned.

Montreal and Quebec City facilities supply some of the more remote areas of northern Quebec and occasionally parts of the Arctic as well as the St. Lawrence River corridor from eastern Ontario to the Gaspé Peninsula via the Trans-Northern pipeline. In northern Canada, weather-dependent delivery systems, mainly by ship, mean that some delivery windows are very narrow. Again, a seasonal “sealift”, as they call it, goes up to northern Canada with refined products.

The next slide deals with the state of the industry today.

Currently there are nine companies operating 15 full petroleum refineries in Canada. They produce a full range of products, such as gasoline, diesel, and jet fuel. There are four partial refineries, which produce asphalt or petrochemicals: two are asphalt facilities in Moose Jaw and Lloydminster, and two are petrochemical facilities in Mississauga and Sarnia. Nationally, Imperial Oil, Shell, and Suncor operate more than one refinery.

One thing to point out is that the refining sector has undergone significant rationalization since the 1970s. The rationalizations in the 1970s and 1980s were a result of a decline in demand caused by price shocks at the time, which led to vehicles becoming more fuel efficient. Demand subsequently recovered, and this recovery encouraged not the building of new Canadian refineries, but the expansion of existing refineries to add capacity.

National capacity today is higher with 15 refineries than it was with 44 refineries in the 1960s. In other words, while we talk about the fact that we’re closing refineries and have fewer of them, the capacity of individual refineries is expanding and we actually have more capacity today than we did in the 1960s. Over the last 10 years, for example, we’ve seen two refineries close, but total capacity has held steady.

The next slide deals with something that Peter Boag will probably go into more deeply.

Refinery utilization rates were above 90% early on in the previous decade. However, since the 2008 recession, they have dropped to 80% in Ontario and western Canada, and to 84% in Atlantic Canada and Quebec. In 2011, the refinery utilization rates in western Canada were slightly affected by hydrogen availability issues, a refinery fire and other minor maintenance issues.

The industry aims for a 94% or 95% utilization rate, which would maximize operational efficiency while allowing for normal maintenance and seasonal turnarounds. Therefore, refineries are currently operating below optimal levels.

The next two slides deal with where refineries and operators are located, something we touched upon earlier.

There are five factors that drive where refineries and operators are located. We work in a market-based system in Canada, so it’s really the market that determines where these things are going to be located.

The first factor is capital cost for new upgraders and refineries. North America is really a single integrated market, and companies don’t make investments in isolation. The United States’ gulf coast has 58 operational refineries that represent 50% of the refining capacity in the U.S., with considerable idle capacity to refine heavy crude oil. Refineries are very expensive. They can cost anywhere between $5 billion and $15 billion to build, so if you have a refinery that is already built, with idle capacity, it is really much more economic to try to get the capacity up in that refinery than to try to build a new one.

The U.S. gulf coast requires little capital investment to be able to process diluted bitumen coming out of the Canadian oil sands. In the situation they are now in, stocks coming principally out of Mexico and Venezuela are declining and need to be replaced, so this increases the demand for heavy crude such as that coming from the oil sands, reduces price differentials, and reduces the need for major new capital investments at present. That is one of the reasons the proposal for the Keystone XL pipeline was there: it was because this infrastructure of refineries on the U.S. gulf coast, which was already set up to do heavy crudes, was losing feedstock from Mexico and Venezuela. That’s what is driving the economics behind that.

The second factor is price differentials. If the cost of crude plus the cost of refining is not significantly lower than the cost of refined petroleum products, then there is not that much incentive. The same holds true for upgrading. If the cost of raw bitumen plus the price of upgrading is not actually more than the price of conventional crude, then again there is less of an incentive. An economically rational company basically seeks to maximize its returns, and this all works its way out through the marketplace.

The average price differential has varied considerably between the price of crude—refined and upgrading—and the actual cost of refined products over the years. That’s what drives the decisions to either invest in refining or not.

We’ll see in the next slide where the capacity utilization is as a result of all these factors right now.

The third factor is contamination. Refineries tend to serve regional markets, although there is some long-distance shipping by ship. Transporting crude does not have the same contamination challenges as transporting refined products. Shipping refined petroleum products over long distances and over multi-product pipelines can lead, for example, to increased sulphur levels, requiring costly remediation at the final destination, so if they’re shipping long distances by pipeline, shippers tend to prefer to ship crude and then refine it closer to market. For example, airports often have dedicated lines from a local refinery to the airport for jet fuel. In Canada, for example, airports in Vancouver, Edmonton, Calgary, Toronto, and Montreal all have dedicated pipelines.

The fourth factor is distribution infrastructure. Shipping one product through a pipeline is easier and cheaper than shipping several products in batches or having separate dedicated pipelines. When you’re shipping crude, you’re shipping one product; when you’re shipping refined, you’re shipping multiple products. The input to refineries is crude oil, whereas products are likely to be gasoline, diesel, and jet fuel. It’s more complicated and costly to transport multiple refined products long distances to customers at many end destinations.

The fifth factor is fuel specifications and seasonality. This is interesting, and it’s something that most motorists don’t know: fuel specifications are extremely stringent and are tailored to the climate within which the fuels are consumed. Gasoline consumed in a warm climate is blended differently from that consumed in a cold climate, and in the same area, specifications will change seasonally. Transporting crude oil versus refined products also provides fuel suppliers with the flexibility to produce different products in response to seasonal demand, for example, heating oil versus gasoline.

We will move on to the summary to put that all together.

Generally speaking, western Canada and southern Ontario refiners mostly rely on western Canadian crude oil, while eastern Canadian refiners largely use eastern Canadian offshore crude oil and imported crude oil.

Our refineries today are fewer in number, but they are much larger and more efficient than they were 50 years ago. Canada refines more petroleum products than it consumes and is therefore a net exporter of both petroleum products and crude oil.

Canada’s crude oil reserves are the third largest in the world. As production increases, it is likely that the amount of Canadian crude oil refined in North America will continue to increase.

Thank you very much, Mr. Corey.

We go now to the Canadian Petroleum Products Institute.

Go ahead with your presentation, please, Mr. Boag.

9 a.m.

Peter Boag President, Canadian Petroleum Products Institute

Thank you.

Good morning, Mr. Chair and members of the committee. I’m very pleased to be here today to provide perspectives on the committee’s study of pipelines and refining. I’m happy to have Carol Montreuil, vice-president of our eastern Canada division, here with me this morning.

CPPI members play a key role in Canada’s energy value chain. They make a significant contribution to many sectors of Canada’s economy. I think you would all agree that transportation fuels are a vital enabler of Canada’s social and economic activities in that they provide that essential fuel that moves people and goods across our country.

Our submission, along with some other pertinent material, is contained in the packages that have been distributed to you. In my remarks this morning I’ll highlight the key points in our submission and focus on four themes. The first is a snapshot of Canada’s refining sector, which supplements the information Mr. Corey has provided.

The second is to clarify the distinctions between bitumen operators and product refineries—I think there is some general confusion around that issue. The third is to compare and contrast the market challenges and opportunities for Canada’s petroleum product refiners and our oil sands producers. The last is to reinforce the role we think public policy-makers can play in promoting a competitive and viable Canadian refining sector.

First is that snapshot. CPPI members have been providing quality and reliable petroleum products to Canadians for more than one hundred years. The industry today contributes $2.5 billion annually to Canada’s GDP. It employs 17,500 highly educated and well-paid refinery workers. In Canada overall today there are 19 refineries located in eight of our provinces, and they have an aggregate production capacity of about two million barrels per day. CPPI members operate 16 of these 19 refineries. In addition to refinery infrastructure, there are 70 distribution terminals and some 12,000 retail sites across Canada that employ 82,000 workers in total.

Refiners produce gasoline, diesel, and aviation fuels, as well as heating oil, and important feedstocks for the petrochemical industry. Some CPPI members are also significantly involved in the production of biofuels, and certainly virtually all Canadian refineries and petroleum producers are now involved in the distribution of biofuels.

As Mr. Corey pointed out, Canada is self-sufficient in and a net exporter of refined petroleum products. Our sector exports about 20% of its output—about 400,000 barrels a day—mainly to the United States and mostly from Quebec and Atlantic Canada. Geographic proximity to the very large northeast U.S. market and the ability to ship by sea or ship relatively short distances to market are key factors that facilitate these exports.

Now, refining is, again, as Mr. Corey pointed out, a very capital-intensive business. It’s one of the most capital-intensive businesses in our economy. A typical new refinery would cost in excess of $7 billion to build today, and that doesn’t include the land acquisition costs that would be associated with that. While no new refinery has been built in Canada for some 25 years, more than $40 billion has been invested in Canadian refineries since 1980. That’s including the capacity expansion of the kind Mr. Corey has already spoken about. As well, it’s directed at continuous improvement initiatives to increase operational efficiency, to enable the refining of heavier crudes, and of course to improve environmental performance.

On that point alone, over the past 10 years, a total of $8 billion has been invested in environmental improvements to Canadian refineries. Currently, CPPI refiners invest close to $3 billion a year in aggregate to sustain their competitiveness in an increasingly challenging global market for refined petroleum products.

Canadian refineries are efficient, but they are not large by international standards. They operate at a size and complexity disadvantage to U.S. refineries and at an even greater disadvantage to some of the new super refineries that are being built in Asia. A good illustration is that we now have one refinery in India, on one location, on one site, that has the capacity to produce 60% of all Canadian refinery output—1.2 million barrels a day from one site, compared to Canada’s two million barrels from 19 sites.

Refining economics generally dictate that refineries be located close to consumer markets. Again, as you’ve heard from Mr. Corey, transporting finished products such as gasoline, diesel, and aviation fuel, especially over great land distances, is more expensive and logistically less efficient than transporting crude oil.

This is a common theme for many commodities that are traded globally. As Canadians, we export a lot of wheat, but we don’t export baked goods. Certainly as coffee drinkers we import a lot of coffee beans, but we don’t import brewed coffee. So this is consistent with a lot of commodities.

However, the economies of scale of some of those larger refineries that I’ve talked about, and also the access to ocean shipping, substantially mitigate the economic impediments of transporting finished products to distant markets. So this does pose significant new competitive challenges for Canadian refineries, increasing the importance of refinery efficiency and the requirement to be globally competitive.

A big part of refinery efficiency is operating at or near capacity; optimal capacity utilization is over 90% and preferably close to 95%. Currently there is excess refinery capacity and below optimal utilization across North America. The latest National Energy Board figures show that through 2010 and 2011 the utilization rates in Canada were in the low 80% range.

As we’ve seen those low utilization rates across North America for the last several years, there has been some continuing consolidation and a number of refinery closures. One has closed in Canada in the last couple of years. Three refineries have recently been closed or idled on the U.S. eastern seaboard. Two weeks ago, a large refinery in the United States Virgin Islands announced that it would cease operations next month. That’s indicative of the kind of business environment we operate in right now.

On product refineries versus bitumen upgraders, there is some confusion over the nature and roles of refineries and upgraders. Often the terms are used interchangeably, but let me emphasize that petroleum product refineries and bitumen upgraders are not necessarily the same. Product refineries are built and configured to process crude oil from heavy to light, from sour to sweet—and now synthetic—into products such as gasoline, diesel, aviation fuel, and home heating oil. They’re generally much more complex than a bitumen upgrader due to the nature of the multiple products they’re designed to produce.

Mr. Corey has already provided a very high-level summary of the refinery process, so I won’t repeat that, but I will emphasize that no two refineries are identically designed and engineered. They do share a number of common features and processes—distillation and cracking—and they use similar state-of-the-art technologies, but specific refinery configuration and process units are employed.

The specific refinery configuration and process units employed are generally determined by the crude oil diet that is available to the refinery and the kinds of products they want to produce that are driven by local market demand conditions, and this is obviously something that is not static. Other factors that do affect refinery configuration are the technological requirements, or the technology available at the time of construction, and of course the way the refinery has evolved over a long period of years to adapt to a changing marketplace situation and/or changing environmental regulations in the relevant jurisdiction.

So no two refineries are alike. In fact, they can be quite substantially different.

Bitumen upgraders are specifically built and configured to produce a 100% bitumen feed, or “dilbit”—diluted bitumen. It’s a form of crude oil, but it has physical and chemical properties that are generally unsuitable for use as a refinery feedstock. So upgrading is an intermediate process whereby bitumen is transformed into higher-value synthetic crude oils suitable as a feedstock for some but again not all refineries. So while a bitumen upgrader may employ some of the same processes used in a products refinery, it’s configured differently to address the specific challenges of the high viscosity and extra-heavy physical and chemical properties of bitumen.

Complicating this distinction, though, is the fact that the operational and process boundaries of a refinery and an upgrader are not clear cut. There’s not a clear line to say this is a bitumen upgrader and that is a refinery. Some product refineries can process bitumen and heavy crudes; generally that means they employ a coker. Some upgraders produce limited amounts of finished products, generally diesel. Also, an upgrader and a refinery can be integrated into a single facility. It’s not a clear-cut distinction, but in general, upgraders and refineries are different.

Moving on to the differences in market challenges between the refining sector and the oil sands industry, certainly Canada’s refiners and oil sands producers live in very different worlds and face very different market challenges and opportunities. There is no question that the upstream and oil sands industry provides a tremendous catalyst for growth in Canada. Growing demand for crude oil, especially from developing economies, is projected to increase for the next 25 years and beyond. This creates attractive export opportunities for Canada’s upstream sector. On the other hand, North American demand for refined petroleum products over the same period is expected to be essentially flat. This fact and the challenges it creates for Canadian refiners were highlighted in a recent Conference Board of Canada report. That report is included in your package.

The fact that petroleum fuel demand has likely peaked, or has nearly peaked, in North America may come as a surprise to some, but it’s a phenomenon that’s experienced in virtually all OECD countries, where demographics, mature transportation systems, new vehicle fuel efficiency regulations, and a growing market penetration of alternative fuels—biofuels and natural gas, for example—and electric vehicles combine to offset any growth in overall transportation energy demand as we move forward for the next 25 to 30 years.

In this context, to go back to some earlier discussion, North American product refining capacity now essentially exceeds demand. Furthermore, the North American refined product market is increasingly exposed to imports from new global supply capacity, especially in the developing economies of India and China, where these massive new super-refineries are operating or being built.

Building new refinery capacity in Canada in this context is a tough sell. It’s hard to justify spending $7 billion on a new refinery when there is already more than enough supply on the continent. However, it is understandable that with increasing production from Alberta’s oil sands, there is an expectation, at least in some circles, that Canada’s refining capacity should also grow. However, the economic truths of supply and demand in the North American context often get lost or ignored in the debate, and the realities of declining North American demand, excess refining capacity, and stiff competition from overseas refiners often get overlooked.

These economics get even tougher when the geographic realities are considered. Alberta, home to most of the oil sands, is landlocked, and far from major refined-product markets in the U.S. Similar economic realities apply to the argument that we should be upgrading more, if not all, of our bitumen in Canada. Certainly we are increasing our amount of bitumen upgrading capacity. There are new upgraders online. Canadian refineries have been, over time, changing their configuration to be able to upgrade more synthetic crude, or more diluted bitumen, but there is a limit. The excess U.S. gulf coast capacity that Mr. Corey spoke about is a major investment hurdle for building new capacity in Canada.

Finally, then, there’s the role of policy in helping to sustain a viable and competitive Canadian refining sector. Certainly sound economic policies and smart, predictable regulations are key enabling factors for a competitive and viable refining sector in Canada. Success, in our view, demands a sound science-based approach to developing new regulatory requirements that include credible and rigorous economic impact and cost-effectiveness analysis. Regulatory structures that are outcome-driven and provide refiners with flexibility to develop and implement the most cost-effective options to meet regulatory requirements….

I go back to that characterization of our refineries that no two refineries are alike. A one-size-fits-all approach that prescribes how refiners need to do their business really doesn’t work for us. We need an outcomes-based regulatory approach that allows those refiners to determine what is the most cost-effective approach to respond to and achieve regulatory compliance given the nature and configuration of their refinery. This is essential if we’re going to continue to overcome the scale and competitive disadvantages that we face, particularly from refiners abroad.

Policy-makers can play a significant role in promoting a globally competitive and viable Canadian refining sector: they can contribute to or detract from Canadian refinery competitiveness through the policy choices they make.

In conclusion, the future size and scope of Canada’s refining sector will really come down to how well we can stack up competitively in what is a highly competitive and increasingly global market. Can Canadian refiners successfully compete to maintain or grow market share in what is in North America a stable or possibly shrinking fuels market? Can Canadian refiners displace current U.S. domestic supply and imports abroad with more Canadian exports? These are important questions.

In the end, the size of Canada’s petroleum products refining sector will be market-driven and will be the sum of many individual business decisions influenced by a myriad of factors, including commercial strategies, crude availability and cost, logistics and labour issues, product demand and market access issues, and of course the Canadian policy and regulatory environment.

Thank you very much. I look forward to your questions.