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EU shifts ground on oil sands
Gary Park For Petroleum News
The European Union has taken a step back without engaging in a full scale retreat from a proposed low-carbon fuel policy that might have closed the door to imports of oil sands bitumen from Alberta.
In the first signs of a softening in the EU’s plans to label crude from the oil sands as more polluting than crude from other sources, Canadian Prime Minister Stephen Harper said key allies, including the United Kingdom, Poland and Italy, showed a willingness to expand the Canada-EU energy relationship.
Underlying the apparent shift from a hard-line stance is the increasing concern among European governments about their dependence on Russian energy imports, amid tensions between Russia and the West over the crisis in the Ukraine.
A new draft proposal of the Fuel Quality Directive, FQD, would require European refiners to report only on an EU-wide average of the emissions for the feedstock they use rather than single out the oil sands.
“The proposed methodology requires suppliers to report (an EU) average greenhouse gas emission intensity per fuel with an option to report supplier specific values,” the draft said.
Harper: In-depth discussion Harper said energy ministers, including Canada’s Natural Resources Minister Greg Rickford, have held a “very in-depth discussion (over the last month) on how we can move forward to enhance our energy security for the Western world generally.”
The Canadian and Alberta governments and the Canadian petroleum industry have engaged in an intensive and prolonged argument that the proposed FQD would discriminate against oil sands crude, while benefiting producers from countries such as Russia and Nigeria, despite their flawed environmental practices.
“We don’t see the crisis in Ukraine as simply an opportunity to market Canadian products, but obviously we’re deeply engaged in a discussion with our allies on how we can make sure that globally our energy supplies are secure and stable,” Harper said.
Alberta wants scientific basis A spokesman for Alberta International Relations Minister Cal Dallas said his government wants a scientific basis for any measures adopted by the EU.
He said Alberta’s primary concern is “with any arbitrary distinction between our energy production and that of others.”
A spokesman for Rickford said the Canadian government would not comment on a “hypothetical outcome” of the EU’s policy making.
He said Canada is a “secure, responsible and reliable source of energy that can make a growing contribution to global energy security” and insisted the FQD, as currently written, is unscientific and discriminatory.
The Canadian Association of Petroleum Producers said it remains wary based on years of debate with EU members over the FQD.
“From what we have heard of the proposal, while it doesn’t discriminate against Canadian oil to the degree it initially did, it still doesn’t encourage transparency,” Greg Stringham, CAPP’s vice president of oil sands and markets, told the Financial Post.
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