The Braya-ing of the Asses
Come by Chance refinery could be done
Officially, the new owners of the Come by Chance refinery are thinking about a shut-down for “economic” reasons, which they tied officially to a tax credit from the United States federal government and “tighter than usual” profit margins.
Really, the refinery is very likely to close and it may never re-open. There are bigger problems than tax credits.
As Reuters reported last May, the American market for bio-diesel has been glutted since shortly after Come by Chance reopened last February. Already at that point, American crude refiners were closing their bio-diesel operations because of the glut and the tight margins every refinery was operating on as a result. They couldn’t look to the export market because as Reuters reported six months ago:
U.S. refiners are widely expected to turn to other markets in Canada and Europe for their excess renewable diesel, market participants said. However, they will face stiff competition from local producers.
Canada's Imperial Oil (IMO.TO), opens new tab is proceeding with plans to build a 20,000-bpd renewable diesel plant near Edmonton which will be able to produce the fuel cheaper than it would have cost them to import from the U.S., the company told Reuters.
Braya Renewable Fuels, which began making renewable diesel in February at the Come-by-Chance refinery in Newfoundland and Labrador, believes operational issues will likely slow down new supply additions.
Braya is producing up to 18,000 bpd of renewable diesel from its plant and sells it through a marketing partner.
Now Braya is jammed up. The optimism in May that things might get better next year - but worse in the meantime - looks a lot more accurate and a lot less like the rosy future expected. Not surprising. American domestic producers if bio-diesel easily outstrip Braya’s puny capacity at 18,000 barrels per day and they come with the offset of being part of major oil companies, like Phillips 66, which can use profits from conventional fuel production to offset the losses from bio-diesel and other renewables.
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If Braya shutters Come by Chance, don’t expect it to re-open, at least not without massive government subsidies on top of the generous help they’ve already gotten from both Ottawa and the crowd currently running the circus in Sin Jawns. This is an election year. The Liberals are as a panicky about winning as they were the last time. They are spending wild. Threatening a closure right before Christmas could be a political play by Braya to sucker the Liberals into bankrolling their project even more than they have.
Lame duck energy minister Andrew Parsons told reporters all sorts of non-committal and optimistic things but he’ll likely be gone before the serious talks start. And if something happens between now and the next election, the decision to bail out Braya will come from the Premier’s Office. Get ready for that because the Premier’s Office is all about one-offs, brain farts, and seat-of-the-pants decisions. There is precisely zero planning of any kind for anything beyond tomorrow afternoon’s social media, zero strategic sense anywhere in government (especially on the political side), and a desperate need to get re-elected at any price. That should be music to the b’ys at Braya’s ears. Look at the Furey-Trudeau tax cut as just the most recent proof.
Nothing new in any of that. And it is 100% predictable because for the past 20 years or so one provincial administration in Newfoundland and Labrador after another has pushed scarce public cash into this scheme or that scam - their own or someone else’s - willy-nilly, and without any thought to the consequences. The crowd currently running place are just more intensely trendy than the others back to 2003 and even less likely to care about risks than the ones before, who all ignored risks. Since 2020, green is trendy globally and so that lust for anything trendy dazzles the political eyes on the 8th Floor. Taylor Swift concerts are like crack to the selfie generation. Posing with celebrities is just as bad. That’s why we shouldn’t be surprised if after Andrew Furey heads for the mainland permanently, he pens his next celebrity book, just like one of his idols, Tony Blair, and on the same theme even though Furey has no advice to offer. Furey is a figment of his own imagination.
That fact doesn’t do much for the rest of us who are stuck paying the bills for one egomaniacal scam after another. Best thing to do with Come by Chance now is what was the best option in 2020: shut it down, clean up as much of the mess as we can, and cut our collective losses. We need to do the same thing with lots of current government projects. We need to try some genuine strategic planning. Sad thing is, it’s not just the government crowd and the party running the place that are bereft, to borrow an Edward Robertsism. No one locally wants to talk seriously about change so much so that you’d swear to God we were all Germans. And if North Atlantic is connected still to the refinery there are at least three Liberals with ties to Furey working there ready to take his cheque.