Canada lobbies against EU oilsands directive
Punitive levy not based on science, feds say
OTTAWA — A multi-year lobbying effort by Ottawa and Alberta against a proposed European fuel law that would label the oilsands a dirtier form of crude is expected to culminate over the next couple of months with key votes by European Union lawmakers.
A vote by EU environment ministers on the proposed Fuel Quality Directive (FQD) is expected this fall during a critical few months for the future of Canada’s oilsands industry and the environmental movement that has targeted the development.
Two senior Alberta government ministers depart Saturday for a weeklong trip to Europe to trumpet what they say is Alberta and Canada’s solid environmental credentials, and have EU countries reject a proposal that would “discriminate” against oilsands-derived fuels.
Federal Natural Resources Minister Joe Oliver — who may return to Europe this fall on his own mission — says Canada supports Europe’s efforts to reduce greenhouse gas emissions, but is also urging the EU to avoid unfairly penalizing the oilsands.
Canada worries that adopting the fuel law — which would slap a higher carbon footprint on bitumen and make it more expensive for European countries to import oilsands crude — would unfairly stigmatize the resource and set an unwelcome precedent.
“It has got to be fair, it can’t be discriminatory, and it should be based on the facts and the science — and this is not. This is my definition of bad policy,” Oliver said Friday in an interview.
What is the Fuel Quality Directive?
The FQD is a proposed European Union fuel law that is designed to reduce emissions from transportation fuel by six per cent by 2020. If approved by ministers and the European Parliament, countries importing oilsands product would face higher carbon offsets and financial penalties compared to more conventional sources of oil.
The European 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.
European Union environment ministers are expected to vote on the proposal in either mid-October or mid-December. If approved, it would then need to be ratified by the European Parliament in 2014. What is Canada’s position? The Harper government insists it supports measures to reduce greenhouse gas emissions and doesn’t oppose a fuel directive that’s based on scientific evidence.
Virtually no bitumen-derived fuels are currently shipped to Europe. But Canada maintains the FQD is a discriminatory and non-scientific approach that singles out oilsands as having higher carbon emissions without any sound studies examining the greenhouse gases from the conventional oil the EU actually imports.
The federal government says the fuel law would also hurt the European refining industry, discourage countries from disclosing accurate environmental data on their resources, and not achieve its climate objectives.
The Conservative government and petroleum sector worry the policy would set a dangerous dirty oil precedent, severely damage the oilsands sector’s global reputation and potentially close future energy export markets.
A couple of proposed pipelines — including TransCanada’s Energy East project and Enbridge’s Line 9 reversal — would ship western Canadian crude to refineries and marine terminals in Quebec and Atlantic Canada, where it could be exported to foreign markets, including Europe.
The Keystone XL pipeline to the U.S. Gulf Coast could also be used to ship oilsands crude to international markets like the EU.
What is the European Union’s position?
EU Climate Action Commissioner Connie Hedegaard says the fuel directive is a “science-based and non-discriminatory proposal,” and the right approach for reducing greenhouse gas emissions.