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Canada locks horns with Europe Oliver issues threat of WTO challenge of EU fuel-quality directive, retreats from trade treat; labels scientists as ‘unrealistic’ Gary Park For Petroleum News
Canada’s Natural Resources Minister Joe Oliver, in waging an almost single-handed crusade, threatened a trans-Atlantic trade scrap over the oil sands before partially backing down.
Taking a break from his seemingly endless visits to the United States to argue for Keystone XL, he tackled the European Union’s planned fuel-quality directive that singles out the oil sands as environmentally dirty to the point of ranking as the most harmful to the planet’s climate.
Oliver said the directive is “discriminatory towards Canadian oil and not supported by scientific facts” — a claim that was immediately challenged by 12 climate scientists and energy experts, who said government policy was delaying transition to an economy that was less reliant on carbon.
“The responsibility for preventing dangerous climate change rests with today’s policymakers,” the academics said in a letter to Oliver.
Investment shift proposed The EU’s directive would shift investment towards lower-carbon oil sources and could reduce carbon dioxide emissions by an estimated 19 million metric tons per year, or the equivalent of removing 7 million cars from European roads.
Oliver, on a trip across the Atlantic, wasted no time wading into deeper waters, declaring that the Canadian government would consider launching a complaint with the World Trade Organization, WTO, the global arbiter of commercial disputes, if the EU proceeded with its directive that would impose an import tax on crude bitumen imports by raising costs on refiners.
Although Canada has no current exports of oil sands production to Europe, its desperate push for new global markets has brought the prospect closer, with TransCanada and Enbridge both on the verge of proposing pipelines to tanker ports on the North American Atlantic seaboard.
In Brussels, Oliver told a news conference: “We are going to take whatever action we need to and may well go the WTO. We will defend our interests vigorously.”
The WTO has the power to order the EU to change its rules if they are found to be unfair, but reaching that point would take years.
EU defends proposal Matthias Brinkmann, EU ambassador to Canada, said he believes the WTO would find no fault with the fuel-quality directive, adding “We are confident our measure will be non-discriminatory and science-based and will stand the test in the WTO.”
He also said Oliver was getting ahead of himself, given that the directive is still in draft form.
Brinkmann also rejected any notion that a WTO appeal would undermine EU-Canada free trade talks, which started in 2009 and are entering their final stages, although a number of issues pose stumbling blocks.
Having entered territory that would normally come under International Trade Minister Ed Fast, Oliver assured reporters that he was “not threatening anything,” conceding the oil sands dispute and trade talks are separate matters.
“We have always kept and will continue to keep separate the issue of trade negotiations and the fuel-quality directive. That’s something which the Europeans also want to do. So there is no issue,” he said.
Softening his line even more, Oliver said Canada is “hoping for a positive result” on the fuel directive, “so we’re not anticipating having to go to any other step.”
Oliver: world needs energy After meetings in Brussels, Paris and London, he said EU commissioners, government officials and industry leaders showed a “growing recognition that the (directive) needs amendment to achieve its objectives (of a 6 percent reduction in the carbon density of the EU’s transport fuels by 2020) and I’m more encouraged than I was a year ago.”
Oliver said the scientists were pursuing an unrealistic goal amidst forecasts that global energy demand will rise by 33 percent over the next 25 years.
“Even under the most optimistic scenarios for renewable, hydrocarbons, fossil fuels, will represent at least 63 percent of the source of energy by 2035. So we have to be realistic. The world needs energy,” he said.
Meanwhile, the government of Prime Minister Stephen Harper has taken a leaf out of Alberta’s strategy book by running ads May 13 in publications targeted at lobbyists and lawmakers in Washington, D.C., touting Keystone XL as a big part of the answer to U.S. energy needs and launched a website containing the same information.
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