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The revolving export door to Europe EU backs away from plans to attach ‘dirty oil’ label to oil sands production, clearing way for Canadian exports; pipeline challenged Gary Park For Petroleum News
One of the threatened barriers to exporting Canadian oil sands crude to Europe has been partly dismantled just as quickly as another is being erected.
The breakthrough occurred earlier in February when the European Union issued a new fuel quality directive that places oil sands production on the same footing as other sources of crude from around the world.
Tim McMillan, president of the Canadian Association of Petroleum Producers, said in a statement the EU decision to abandon its plans to single out crude bitumen as “dirty oil” means “our oil will not face discrimination in Europe.”
“It also opens the door further for Canadian companies to compete on a level playing field for new markets in Europe and abroad,” he said.
McMillan said Canada should now turn its attention to “building the infrastructure to get Canadian oil to world markets by all means in all directions” and should make market access a “national priority to grow our economy.”
Although Canada does not currently have any dedicated means of shipping crude to Europe it supplied about 4.5 percent of Italy’s imports in the first half of 2014.
Opposition to Energy East But the key prospect for providing that infrastructure - TransCanada’s Energy East pipeline proposal - is facing mounting opposition, with Ontario’s First Nations leaders taking the latest stand by demanding the National Energy Board stop its review of the C$12 billion project to move 1.1 million barrels per day from Western Canada to refineries in Ontario and Quebec and to two export terminals.
In a letter to Natural Resources Minister Greg Rickford, Ontario Regional Chief Stan Beardy said First Nations have “grave concern” about the Energy East regulatory review, claiming the board has been unwilling to share information.
He said the NEB process is “unable to discharge the duty to consult and accommodate, lacks transparency in decision making and is contrary to the principle of free, prior and informed consent.”
The letter makes it likely the aboriginal communities will take their case to the courts if the pipeline gets final approval from the federal government.
Ontario Energy Minister Bob Chiarelli endorsed the First Nations’ argument that aboriginals are “not being adequately consulted,” even though TransCanada Chief Executive Officer Russ Girling said his company has held meetings with 200 communities along the route.
NEB says it has engaged The NEB said it has “done extensive aboriginal engagement” with those affected by the pipeline and published information on how interveners can participate and gain access to funding.
Energy East is viewed by the industry as its best chance to turn Europe into one of its long-sought alternatives to the United States export market and take advantage of political turmoil in Europe which could drastically affect its imports of oil and natural gas from Russia if the Ukrainian conflict expands.
For years, factions within the European Union had tried to implement the fuel quality directive that labeled the oil sands as more carbon-intensive than conventional crude and close off Europe to imports.
But the last four months have seen a sudden shift, resulting in a deadline for comments on the latest fuel quality directive passing without any adverse comments.
Rickford said Canada was pleased “that after five years, a carefully crafted FQD has emerged that is both fair and better reflects current science.”
McMillan said Canada is now hopeful if can “provide a stable, secure supply of responsibly produced energy and reduce Europe’s supply risk due to geopolitical factors.”
CAPP said oil sands crude has a similar carbon footprint to other heavy oils around the world and to conventional oil produced with associated flaring of natural gas, noting that the industry has reduced oil sands greenhouse gas emissions by about 28 percent a barrel since 1990.
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