13 March 2011

Toronto Sun needs oil fact checker

Here’s the quote:

So you’ve got the only oil refinery processing Newfoundland crude owned by the South Korean government, while the other oil refineries in Eastern Canada process oil pumped from wells located halfway around the world.

That comes after a lengthy discussion about the Come by Chance oil refinery and where crude from the Newfoundland offshore goes.

Slight problem.

Come by Chance refines oil from Iraq, Venezuela and Russia.  It doesn’t refine anything from the local offshore.

Certainly the company that owns the refinery could get oil from the local offshore if it wanted to use it.  Some people like to spread a fable that the 1985 Atlantic Accord prevents it, along with prohibiting the construction of a new refinery in the province. But truth be told it merely puts some restrictions on refining Newfoundland offshore oil in Canada.

The oil companies ship their product to the United States because it is more profitable for them to do that.  They take the oil they pump out of the ground and ship it to their refineries and sell the refined products in their gas stations across the Untied States.


Makes good economic sense.

Meanwhile, the crowd at Come by Chance buy cheaper heavy sour crude from places like Venezuela and Iraq and ship that into the United States.  The stuff offshore Newfoundland is light, sweet crude, incidentally.  Higher wholesale price but also easier to refine into more products.  That means it is much more profitable in the longer run.

Someone at the Sun really needs to do some checking of those pesky facts.

- srbp -