The Come By Chance refinery is producing fuel again. This time, it's a different type of oil
Braya Renewable Fuels spent hundreds of millions to convert former oil refinery
The Come By Chance refinery has officially entered the global race to produce cleaner fuels for the transportation and manufacturing industries, and the owners of the former oil refinery in Newfoundland's Placentia Bay say they're just getting started.
"We are now a cornerstone in the progress toward a net zero economy," Todd O'Malley, chief executive officer of Braya Renewable Fuels, said this week from his office in Dallas.
The company and its employees achieved a milestone last weekend when it converted a feedstock of animal fats and vegetable oils into a ready-to-use diesel fuel that can be used in everything from a pickup truck or a train, or even power a factory.
Braya said its product reduces overall carbon emissions by more than 50 per cent when compared with petroleum-based diesel.
"The future is bright for us," said O'Malley, adding that the demand for low-emitting fuels will continue to increase as countries retool their economies in an effort to lower carbon emissions and intensify the fight against climate change.
Braya is owned by a Dallas-based private equity firm called Cresta Fund Management. The firm acquired the refinery three years ago and has invested hundreds of millions of dollars to convert some processing units at the facility to allow this new type of refining, with a workforce of up to 800 people on site for many months.
Prior to its closure four years ago after the COVID-19 pandemic shook up the global economy, the facility was refining up to 130,000 barrels of oil every day. The refinery opened in 1973 and underwent ownership changes through the years — although its focus was, until now, on petroleum.
O'Malley said the plan is to scale up daily output to about 18,000 barrels of renewable diesel in the coming weeks and deliver the inaugural shipment of about 300,000 barrels to international customers some time this spring.
So how is an operation that produces only a fraction of what the old refinery once did able to make money?
O'Malley said governments everywhere are striving to end the dependence on fossil fuels and have introduced measures such as low-carbon fuel tax credits to make products like renewable diesel more affordable. In some areas, like California, laws are being introduced to mandate the use of fuels like renewable diesel.
"As a result of that it is finding its way economically into the fuel pool," said O'Malley.
"We wouldn't have gone down the the path of investing this money … if we didn't believe that that the economics of the plant were viable and sustainable for the long term."
The federal government was also a big investor — $86 million from innovation and clean fuels funds — because the project supports efforts to decarbonize the economy, and the provincial government spent millions to protect the refinery's infrastructure while a search for a buyer was carried out.
'A fantastic day for Braya'
O'Malley said the beginning of commercial operations at the refinery was "a fantastic day" for Braya, its employees and Canada in general.
There are now 200 full-time employees at the site, less than half of what the refinery employed when it was in the oil business. But O'Malley said that number will grow because the owners plan to increase diesel production, expand into sustainable aviation fuels and become a global player in the green hydrogen industry.
"We are incredibly grateful for all of the hardwork and dedication of the Braya team," he said.
But the conversion had some major setbacks, and was about two years behind schedule. A flash fire 17 months ago also resulted in the death of Clarenville resident Shawn Peddle and injuries to seven others. An RCMP investigation into the blast is ongoing.
O'Malley, who joined Braya in October, said the tragedy was an "incredibly difficult time" for the refinery and everyone linked to it. He said his priority is to run a plant that is safe, reliable and environmentally responsible.
"We're looking forward to being a part of the local economy … for as long as I'm alive, and certainly and hopefully longer than my kids are around," said O'Malley.
How is a fuel labelled 'renewable'?
The diesel is labelled "renewable" because it has similar properties and can be used for the same purposes as petroleum-based fuels but is made from naturally occurring biomaterials instead of non-renewable fossil fuels.
O'Malley said he couldn't reveal who is buying the product because of commercial sensitivities but agreements are in place for the sale of every barrel produced at the refinery. And he isn't ruling out the possibility that Braya diesel could one day be fuelling engines and machinery in Newfoundland and Labrador, "if and when the local market is ready to take some of this fuel."
O'Malley said the fuel will meet the specifications of "every market around the world."
Braya is procuring its raw material by ship from the United States, South America and Europe, taking advantage of the refinery's strategic coastal location and deep port. O'Malley said Canadian sources of feedstock such as soybean and corn oil are "somewhat uneconomical" because of the costs associated with transporting the material from central and western Canada.
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