Alberta oil sands, what am I missing?

So it seems all of the opposition to Alberta oil sands oil is that it is particularly heavy and corrosive, and it make any pipeline it travels through particularly vulnerable to spillage. So all of the controversial pipelines, Transmountain, Keystone XL, and Energy East, will not be as controversial if you can refine the heavy crude down to light crude. Apparently all of the heavy crude refineries are in the Gulf of Mexico. So why not build a heavy crude refinery right in Alberta right near the oil sands, and then you can convert it to light crude before transporting it long distances. It would give Alberta some additional refinery jobs, etc. Why don't they do this?

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  • 2 weeks ago
    Favorite Answer

    It is a matter of costs and earnings, among other things.  Refineries are extraordinarily expensive to build, operate, and maintain.  And even if the refining were to be done in place (at the location of extraction), this would do nothing to change transport costs.  They will remain whether that is done before or after product treatment.  It is cheaper to transport bulk product in pipeline than refined product in railcar or truck, and when the buyers of the product are well-distant from the site of product refining, it becomes very difficult to be cost-competitive.

    Of course, if there were a few billion dollars around to build a refinery, and time to do it, and an expected lifetime of that refinery to make the cost possible to spread out over decades, and there was an adequate associated infrastructure to minimize secondary costs, and so on, then they would build such a refinery.

    It is basically a lot cheaper to send unrefined bulk product to somewhere else than it is to build a new refinery from scratch.  Besides, existing refineries have already been paid for and are way freaking cheaper to keep using.

    • YKhan
      Lv 7
      2 weeks agoReport

      The Canadian government just bought one of the proposed pipelines for $4 billion a couple of years back, hoping to get that project going. They seem to have enough money for a pipeline, so why not just also build a refinery too?

  • D g
    Lv 7
    2 weeks ago

    the reason  companies dont build  new refineries   is simple   if you make too much of a product its  COST GOES DOWN

    • YKhan
      Lv 7
      2 weeks agoReport

      The government can always build it itself, or give subsidies to companies to do it.

  • 2 weeks ago

    You are unfamiliar with refinery costs, environmental damage, and labor requirements.

    Many millions are spent on building even a small volume refinery.  One like you want would be huge and very costly.

    The operation of one in Alberta will degrade the air quality.  The extracted goo from the heavy oil has to go somewhere.  Cannot just bury it or spread it around the landscape.  If changed into something useful, that takes even more refinery equipment.

    People to run the refinery properly must be experienced or well trained.  That will take people who are working at one already who are willing to move to that area.  Few from Texas or California would be willing to do that.

    Source(s): Former resident of Houston, where most refineries are. My father worked in management for a US oil company.
    • YKhan
      Lv 7
      2 weeks agoReport

      There are already light-crude refineries in Alberta. Building a heavy-crude refinery shouldn't be all that different. Getting the personnel over for a temporary stint to get the locals up to speed should be possible too.

  • Bob
    Lv 7
    2 weeks ago

    great idea, lets get to work.

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