A few days ago, Alberta Premier Rachel Notley announced that she was giving a $440 million loan guarantee to a Calgary company called Value Creation that was building a massive new oilsands upgrader near Edmonton.
She was joined by Dr. Columba Yeung, the president and majority owner of the company.
The accompanying press release read in part:
Calgary-based Value Creation Inc. (VCI), and its wholly-owned subsidiary Value Chain Solutions Inc., is on track to invest $2 billion in an upgrading facility in the Alberta Industrial Heartland, just east of Edmonton, which will create more than 2,000 construction jobs and another 200 full-time positions once the facility is up and running.
Notley went even further, saying:
Construction of the Strathcona County-based project is already underway.
Except it’s a lie.
Our Alberta bureau chief, Sheila Gunn Reid, went to the project site, which just happens to be down the road from her home. There is no activity there at all. There is no construction already underway. There is no construction at all. It’s mainly empty fields. It looks like there was some construction ten years ago, but then it was abandoned. They haven’t put a shovel in the ground in a decade.
So I did something that I don’t think any of those Media Party journalists who wrote gushing stories about Notley’s announcement did:
I just picked up the phone and called the company.
WATCH to see what I learned from Iva Georgieva, who is in charge of public relations for Value Creation.
It lined up with other research I did, like the news story I dug up that was written 10 years ago:
BA Energy became the first oilsands casualty of the world-wide economic slowdown, after the company filed for bankruptcy protection. The company and its parent company, Value Creation Inc. (VCI), is struggling to stay afloat after halting construction on a massive upgrader project. BA is suffering from a cash flow shortage and as such will be unable to repay a loan of approximately $50-million plus interest to VCI due Dec. 31, 2008...
This company that Notley is about to give a $440 million loan guarantee to, had to repay a $50 million loan back on December 31, 2008. But they ran to court two days before it was due, and told a judge they just couldn’t pay it.
Let me read from Dr. Yeung’s affidavit back in 2008:
BA Energy is suffering from a cash flow shortage and as such will be unable to repay a loan (as defined below) of approximately $50 million plus interest to VCI due December 31, 2008. The failure to repay the loan may place VCI in default of its main credit facility thus permitting the credit facility lenders (as defined below) to accelerate repayment and immediately demand the full balance owing on the VCI PIK Loan, which will, as of January 9, 2009, amount o approximately US$507 million.
It goes on like that for a long time. He was asking the court to protect his company from creditors who want to be repaid $507 million.
It was tough economic times. And his partial bitumen upgrader idea wasn’t selling. He told the judge his technology was really, really good, and when oil prices were better maybe someone would invest in them — the same technology that Notley is talking about.
When he said that, the price of oil was $35 a barrel. By mid-2011, the price of oil had tripled.
But still, nobody wanted to invest in Dr. Yeung’s technology. Serious companies came to investigate it — but none of them thought it worked.
I found an oilsands CEO from a multi-billion dollar company who seriously investigated it back then. That CEO is retired now, and asked to remain anonymous. But here’s what he told me when I asked about Dr. Yeung:
"[H]e has spent the last 15 years trying to convince all serious refining players that his technology of partial upgrading is the answer to all problems. It would have been if it only worked. Total, Shell, BP etc. all looked at his technology but none believe it will work. Suppose it is easier to convince the NDP.”
And that’s the thing. Dr. Columba Yeung convinced a bank called Credit Suisse to lend him $50 million, and then he defaulted, and sought creditor protection.
His website shows no operational activity in a decade, because there hasn’t been any.
Until Rachel Notley came around, with a promise of $440 million of your money and mine.
I decided to contact Dr. Columba Yeung directly.
And he confirmed via email what Iva Georgieva told me on the phone:
They’re not an operating company.
They don’t in fact have construction underway.
And he said it wouldn’t make sense to raise money yet.
Rachel Notley lied about this upgrader. It’s an empty, snow-covered field. There’s no construction underway. There’s no money that’s lined up.
But the entire press gallery in Alberta is complicit in this lie, too. We here at The Rebel are the only people who even bothered to check the facts.
Did you know that Notley’s hand-picked election commissioner is prosecuting The Rebel for our journalism? Because we criticize Notley, they claim we are breaking the law. To learn more about that case, and to help pay for our legal defence, please visit StandWithTheRebel.com
If Notley gets her way, we’ll be put out of business — then she won’t have to worry about embarrassing questions from independent reporters.