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Canada wins first round with EU
Gary Park For Petroleum News
Intensive lobbying by the Canadian government over two years, accompanied by threats of an international trade challenge, won the first round of a battle to discourage the European Union from labeling Alberta’s oil sands as a “highly polluting” source of crude.
Britain, France and the Netherlands — whose major oil companies BP, Total and Royal Dutch Shell all have stakes in the oil sands — helped derail support for the proposed Fuel Quality Directive at a European Union technical committee.
But the battlefront now shifts to EU ministers who will have to decide the fate of the directive in June.
Canada’s Natural Resources Minister Joe Oliver and Alberta Premier Alison Redford have pledged to keep up the lobbying pressure.
The anti-oil sands initiative is being driven by EU Commissioner for Climate Action Connie Hedegaard, who is calling for a mandatory target for fuel suppliers to reduce the carbon footprint of fuels by 6 percent over the next decade, assigning a greenhouse gas value of 107 to the oil sands, compared with 87.5 for average crude oil, if oil sands by-products were ever sold in Europe.
Under the directive, EU refiners and markets would be required to reduce the carbon content of their overall fuel mix.
Canadian governments, oil sands producers and legal observers have consistently argued that penalties should only be imposed on emissions from the actual fuels and not the process by which those fuels are derived.
Oliver said Canada does not want the oil sands to be “stigmatized … without any scientific basis,” thus affecting the readiness of other countries to invest in or purchase the crude.
He said Canada’s efforts over recent months are resonating with EU countries, including Britain, France, the Netherlands, Spain, Estonia and possibly Poland.
Redford said Alberta has to work even harder to persuade customers that it is taking a balanced approach to oil sands development and “strive to excel at environmental stewardship.”
Canada would defend interests David Plunkett, Canada’s ambassador to the EU, said in a letter to Hedegaard that if the EU singles out oil sands crude in a “discriminatory, arbitrary or unscientific way,” or takes steps that are inconsistent with the EU’s international trade obligations, Canada will defends its interests, including at the World Trade Organization.
Dan Woynillowicz, a spokesman for the Alberta-based Pembina Institute, an environmental think-tank, agreed the EU standard could be improved and made fairer by setting emission standards for a broader slate of crude sources.
But he forecast the pressure will rise again from Europe, where lawmakers are committed to reducing carbon levels and will take further action as the impacts of global warming become clear.
The oil sands sector derived some satisfaction from research by Andrew Weaver and Neil Swart, climate scientists at British Columbia’s University of Victoria, who said in a paper published in the journal Nature that coal is a larger threat to the world’s climate than the oil sands.
They estimated that if all of the Alberta oil sands were burned the average global temperature would rise by 0.36 degrees Centigrade based on carbon emissions, compared with a rise of 15 degrees if the world’s coal was burned.
However, Swart said that if other countries followed Canada’s example and exploited their fossil fuel sources to a large extent the resulting global warming “would be very large.”
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