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Canada fighting EU plans to label oilsands world’s dirtiest crude source
News Articles Featured | Vancouver Sun | October 19, 2011
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The Harper government and Canada's energy industry have launched an intensive lobbying campaign to have the European Union rethink proposed fuel quality standards that would penalize the Canadian oilsands and label the resource one of the dirtiest crude sources on Earth.
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The Harper government and Canada's energy industry have launched an intensive lobbying campaign to have the European Union rethink proposed fuel quality standards that would penalize the Canadian oilsands and label the resource one of the dirtiest crude sources on Earth.
Photograph by: Bruce Edwards, Edmonton Journal
OTTAWA — The Harper government and Canada's energy industry have launched an intensive lobbying campaign to have the European Union rethink proposed fuel quality standards that would penalize the Canadian oilsands and label the resource one of the dirtiest crude sources on Earth.
And while Canada ratchets up its pro-oilsands campaign, the world's energy ministers warned Wednesday that the increasing reliance on fossil fuels "risks significant negative global impacts" — including growing greenhouse gas emissions that pose "dangerous consequences for the global environment and human welfare."
Federal Natural Resources Minister Joe Oliver met Wednesday in Paris with energy ministers from around the globe, where he delivered Canada's case for the European Union to vote against the proposed Fuel Quality Directive — which would slap a higher rating of carbon emissions on oilsands-derived fuels.
His trip comes on the heels of the Canadian Association of Petroleum Producers — the energy sector's main lobby group — travelling to Brussels and London to make its own pitch to European officials and business leaders.
And early next month, Prime Minister Stephen Harper will have an opportunity to raise the issue with European leaders attending the Group of 20 summit in Cannes, France.
Canada believes the fuel directive is discriminatory against the oilsands because it singles out the resource as having higher carbon emissions without any sound scientific studies examining the greenhouse gases from conventional oil the EU actually imports.
Ottawa fears the EU's actions could severely damage the oilsands industry's worldwide reputation and close future export markets.
Oliver said he has sent a letter to the European commissioner for energy in Brussels outlining Canada's position. He has also dispatched a senior department staffer to meet with eurozone officials and sent copies of the letter to all members of the EU.
"The EU needs to do its homework before it finalizes the (FQD)," Oliver told reporters on a teleconference call from Paris, following meetings with ministers of the International Energy Agency.
"The level of analytical rigour by the (European) Commission is insufficient and cannot support regulatory actions," he added. "We believe the EU's proposed approach is unfounded."
Canada has been trumpeting the carbon-intensive oilsands as a secure and stable energy supply during a time of global economic turmoil.
But Wednesday's official summary from the International Energy Agency meetings — which featured ministers and delegates from 37 countries representing more than three-quarters of the world's energy consumption — demonstrates the challenges Canada faces in selling oilsands development.
Martin Ferguson, an Australian MP and current chairman of the group, said in his closing summary that ministers were briefed on a soon-to-be-released World Energy Outlook report, and the findings were alarming.
"The scale and breadth of the energy challenge is enormous. Unless much stronger action is taken, global energy demand is set to continue on a long-term upward trend with fossil fuels accounting for the bulk of the increase. This risks significant negative global impacts," Ferguson says in his summary.
Persistently high levels of spending on energy imports would impose a drag on economic growth in many countries, he warned, and the risk of serious disruptions to energy supplies could continue to mount.
Moreover, he said the upcoming report shows that continued reliance on fossil fuels would see energy-related carbon dioxide emissions lead to a long-term global temperature increase of more than 3.5 C — "with dangerous consequences for the global environment and human welfare."
Oliver, however, said he told his counterparts the EU's approach to reducing greenhouse gas emissions in the fuel supply is counterproductive. The standards target oilsands fuel — when Canada exports virtually no crude to Europe — and ignore the greenhouse gas intensity of actual imports from places like Russia or Nigeria, he said.
He is warning the EU that adopting the proposal could trigger a challenge before the World Trade Organization.
"Having a measure that provides for more onerous treatment for the oilsands relative to other crudes which haven't been analyzed is discriminatory and it potentially violates the European Union's international trade obligations," he added.
But the Conservative government is hoping the EU might reject the proposal when the European parliament votes on the matter, likely later this fall.
"We do have some hope that the parliament will vote it down, and that would be a good thing," he added.
Earlier this month, the European Commission, the EU's executive arm, approved placing a higher carbon-emissions value on bitumen-derived fuel than conventional oil under the Fuel Quality Directive.
The commission has recommended oilsands-derived fuel be given a greenhouse gas rating of 107 grams per megajoule, 22 per cent higher than the 87.5 grams assigned to fuel from conventional crude oil.
The aim of the fuel directive is to reduce emissions from transportation fuel by six per cent by 2020. If approved by the European parliament, importers would face higher carbon offsets in order to trade in Canadian oil.
Determined to have Europe reconsider its approach, the Canadian Association of Petroleum Producers made presentations last week to EU officials in London and Brussels.
Greg Stringham, a vice-president with CAPP, said the industry is concerned about the proposed fuel standards for three key reasons, including potential discrimination against the oilsands, setting a dangerous precedent for other countries and the potential to "artificially" close future energy export markets.
"If you want to have a policy like (the Fuel Quality Directive), make sure it is a sound policy, based on science," Stringham said. "Right now we don't see the science saying there is any reason to single out the Canadian oilsands."
But Jennifer Grant, oilsands program director at the Pembina Institute, an Alberta-based environmental think-tank, said the oilsands sector and Harper government will have a difficult time arguing their case when Canada remains an environmental laggard.
The country has no national carbon price or cap-and-trade emissions reduction program, she said, nor has it adopted gritty greenhouse gas regulations for the oil and gas sector.
"The Fuel Quality Directive target for bitumen is actually indicative of the direction the world is heading, and Canada is paddling upstream to defend high-carbon energy," she said.
Read more: http://www.canada.com/business/Canada+fighting+plans+label+oilsands+world+dirtiest+crude+source/5575302/story.html#ixzz1cPCG9ODk
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