I Want You to (Refine) Me, Part 2 - Western Canada's Refineries Provide a Bonanza of Fuels

Long established as an oil-producing region, Western Canada has also become a major producer of refined products. With enough oil available to serve the nine refineries in the region, there is no need to import crude oil, making Western Canada one of the few parts of the world where the refineries are completely self-sufficient regarding oil supply. The region is also noteworthy in that, like the U.S. Gulf Coast, its refining capacity and gasoline, diesel, and jet fuel output is vastly greater than its own demand, resulting in a large surplus of refined fuels that can be sent across Canada and exported to the U.S. Today, we look westward, focusing on the nine refineries located in the Canadian West.

Although the presence of crude oil in Western Canada had been known to First Nations inhabitants for centuries, oil production did not really pick up momentum and scale until just after the end of World War II. The celebrated Leduc No. 1 oil discovery in 1947 near Leduc, AB — just south of the provincial capital of Edmonton — kicked off the modern oil industry across Western Canada, resulting in a steadily growing supply of crude oil to its own refineries, those in other Canadian provinces, and the U.S. That growing production has allowed all 17 of Canada’s refineries, which we summarized in Part 1, to partly or fully wean themselves off imported crude oil. In 2020, Canada’s crude oil imports averaged 435 Mb/d, down from 800 Mb/d 10 years earlier, with most of the imported crude now being sourced from the U.S. With crude runs to Canadian refineries averaging 1.59 MMb/d in 2020, the roughly 1.15-MMb/d difference between those runs and imports (1.59 – 0.435) is largely supplied by Western Canada.

From 19 micro-sized refineries with a combined capacity of just 68 Mb/d in the late1940s, the refining sector in Western Canada has undergone decades of expansion and eventual consolidation to reach the final tally of nine refineries (green numbered diamonds in Figure 1) with a total capacity of 770 Mb/d as of 2020. Of that, the combined capacity of the refineries in Alberta (#1 to #5) is 546 Mb/d, while those in Saskatchewan (#6 and #7) total 147 Mb/d and British Columbia’s (#8 and #9) refining capacity adds up to 67 Mb/d. Note that Alberta’s and Western Canada’s total refinery capacity are slightly higher than we stated in Part 1 due to a subsequent year-end disclosure by one of the refiners — more about this in a moment.

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