Chevron wants a tax break

Burnaby's Chevron refinery wants a break on the carbon tax.

"Our issue is that as the only remaining refinery in the Lower Mainland, Chevron pays carbon tax on the fuels consumed in the refining process," said company spokesperson Ray Lord. "The majority - about two-thirds - of B.C.'s fuels needs are imported from refining facilities outside of B.C. and are not subject to the B.C. carbon tax."

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Chevron is working with the provincial government to ensure fair and equitable carbon tax treatment of refined fuels, regardless of whether they are manufactured in B.C. or imported into the province, Lord said.

Chevron paid roughly $9 million in carbon taxes last year for the fuel used in the refining process, and Lord estimated that the refinery has paid roughly $22 million since the tax was implemented in 2008.

"The carbon tax has risen annually since 2008 by $5 per tonne of CO2, and the amount of tax we've had to pay annually has risen accordingly," he said. "We expect that in 2012, carbon tax paid may be in excess of $10 million."

Lord said the refinery's annual CO2 output is approximately 400,000 tonnes.

Chevron wants fair and equitable carbon tax treatment of refined fuels, regardless of whether they are manufactured in B.C. or imported into the province, Lord said.

Chevron, the sole remaining refinery in the Lower Mainland, brings in crude from the Alberta oil sands. Alberta also has a carbon tax, but it's only $15 per tonne for companies that exceed a certain limit, while B.C.'s rate is $25, rising to $30 in July, and applies to all fossil fuel combustion in the province.

Other former refineries on the Burrard Inlet are now distribution terminals, which use already refined petroleum products brought in from outside of B.C.

Matt Horne, director of the climate change program with Pembina Institute, found Chevron's position "frustrating from a capital perspective."

"It loses sight of what we're trying to accomplish, which is reduction of greenhouse gas emissions, and the carbon tax is one the province's (best) tools to drive down emissions."

Horne pointed out that corporations, like Chevron, already benefit from the carbon tax; the government reduced the corporate income tax rate from 12 to 10 per cent to keep the tax revenue-neutral. (Lord declined to provide information on those savings for the refinery.)

The carbon tax brought in $741 million in 2010/11, an estimated $960 million for 2011/12, and the forecast for 2012/13 is $1.172 billion.

"Chevron, like every other business in the province, is benefiting from those tax cuts, and that conveniently gets ignored when people complain about the carbon tax," Horne said.

Horne estimated that Chevron's CO2 output of 400,000 tonnes was equivalent to 80,000 cars on the road.

"It's not the biggest single source, but it's not a negligible source either," he said.

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