2 Violins: It's good to hear from you again. In terms of your question why keep an unprofitable business running, this is the early history of the Oil Sands. In 1967 Great Canadian Oil Sands which was later bought out by Suncor started producing bitumen and in 1969 Syncrude started to mine the oilsands. They both took huge losses for decades until they started turning a profit a few years ago. The creators of these projects had a great vision that one day the oil sands would be profitable. They showed leadership in creating an industry where one did not exist, and they foresaw that there would not be a profit for many years until the price of oil went from $2.00 a barrel back then in 1967 until it reached a reasonable price per barrel in the 1990's. Why did both oil sands businesses run at a loss for so long? Vision and leadership. The management of both businesses knew that with a rise in the price of oil in the future that both oil sands producers would become obscenely rich. How much did it cost to build Suncor and Syncrude's oil sands projects in the 1960's? Dirt cheap compared to what it would cost to build them today. In comparison their production costs today are lower than most other bitumen producers. They both made huge profits the last number of years until the perfect economic storm hit at the end of 2008 to now. They are not making money from their operations today due to $40.00 oil. Will they shut down? Not on your life because they know they will be profitable soon again as the price of oil rises. These are 70 year projects. 2008 is a mere blip in time looking at a 70 year production timeline.

Looking at the refinery situation in North America. No new refineries have been built since the end of world war two they say. So how have huge increases in demand for gasoline since WW II been handled? Through the expansion of existing refineries. Many refineries at the end of WW II were the size of MRC...ie...10,000 barrel a day refineries. However, to meet increasing demand existing refineries were expanded as it is cheaper to expand an existing refinery than build a new one. A refinery can only sell gasoline, jet fuel, asphalt etc. for the price that the market will bare. In 2008 refineries had to pay way more for their feedstock with oil at say $140 dollars a barrel but they could not then turn around an sell their gasoline at what it was worth to the public as the public (the market) would not pay the price. It would have been outrageously high. So the oil companies sold gas for the maximum that the market would pay for it at the pumps and they sucked up the loss. As someone already stated, the refineries are getting the money back from the losses in 2008 over the next five years. Today you are paying a lot more for gas than it is worth at the pumps and the oil companies are slowly recouping their losses. Would people in the USA and Canada pay $5.00 or $6.00 a gallon for gasoline during 2008 which is what the refineries should have charged to make a profit? Noway. The public would have revolted, the gov't would have regulated gas sale prices and the economy would have been in a worse state/

MRC will increasing be more ecomomically profitable this year with huge demand for asphalt, jet fuel and diluent. As I have stated in another posting there are other reasons for owning the MRC refinery. MRC was purchased originally as the bankers wanted Connacher to have it in order to loan Connacher the $600 million to build POD 1 and Algar and to extend lines of credit to Connacher. So whether the integrated approach works perfectly or not really doesn't matter as Connacher needed the refinery to secure the loans and future lines of credit. Also the refinery is a good hedge against a takeover as nobody really wants to buy a refinery today especially a 10,000 barrel a day refinery in a remote location for a number of reasons. So instead of trashing MRC continually in posts why don't we accept it as part of Connacher's 3 legged stool approach. I didn't hear anybody complain about getting rid of MRC during the conference call or at last years annual general meeting. You and I both now from the 2008 Annual Report that Connacher is not going to get rid of the refinery in the near future so why continue to complain about it and that the integrated approach does not work? It just is. Deal with it.

Best Wishes; Scott

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