Natural Resources Minister Joe Oliver is in Europe this week to fight proposed legislation he says discriminates against the oil sands and could damage the reputation of Canadian energy products around the world.
The European Union’s controversial “fuel quality directive” requires a 6% reduction in the greenhouse gas intensity of vehicle fuels by 2020. Intensity levels are calculated based on the entire life cycle of the fuel, meaning emissions from the extraction, processing and distribution of the product are included in the final number.
Under the EU formula, oil sands “natural bitumen feedstock” is assigned a greenhouse gas value 22% higher than conventional crude oils. Oliver — who will be making the federal government’s case in Paris, Brussels, and London this week — said that figure is arbitrary and unscientific.
“We have no problem at all — in fact, we support — a policy that has as its objective the reduction of greenhouse gas emissions from the use of hydrocarbons for transportation. However, we think it has to be fair and effective, and the directive as it is currently drafted is fundamentally flawed,” Oliver told the Calgary Herald on Sunday.
The European Council — the EU body that represents individual countries — was originally set to vote on the directive in June 2012. But after intense lobbying by Canada as well as the European oil industry, it delayed the decision to conduct an impact assessment first.
A decision is now expected sometime this year, possibly as late as fall.
While Canada does not currently export oil to Europe, Oliver said he’s afraid of the message that will be sent if Europe’s leaders essentially declare oil sands product to be “dirty” oil.
“What we don’t want is to see our oil stigmatized and potentially hurt our other markets,” he said. “What we don’t want is to somehow see our oil labelled in a negative way.”
Oliver said Canada is being unfairly targeted in part because it is transparent about its greenhouse gas emissions. He said some other oil-producing nations that don’t have strong regulatory and oversight systems are simply assigned an “average” value under the EU formula.
He also said the EU formula appears to go easy on countries that are major oil suppliers for Europe by allowing all types of crude oil — including heavy crudes that Oliver said have similar emissions to oil sands crudes — to be bundled into one “conventional crude” category.
But while Oliver hopes his trip will convince European business and government leaders of the legislation’s flaws, environmental think-tank the Pembina Institute said the fuel quality directive’s science is correct.
A Pembina Institute paper on the topic published last year states that on average, oil sands production produce significantly higher emissions than conventional crude oils.
“The life cycle GHG emissions intensity of oil sands ranges from around 12 to 40% higher than the average intensity of conventional fuels used by Europeans,” the paper’s authors write. “Given this clear distinction, the treatment of ‘natural bitumen’ as a separate feedstock is well justified.”
The Alberta government has also taken up the fight in defence of the oil sands. Alberta’s International and Intergovernmental Relations Minister Cal Dallas and Environment Minister Diana McQueen were in Europe at the end of January to talk about the issue, and Alberta’s U.K. trade office manager will be in Brussels this week to get an update on the EU fuel quality directive.
“Every opportunity we get we’re certainly articulating an Alberta perspective and why we see compelling reasons that the fuel quality directive requires modification to properly position an issue that on principle we support — around lowering the carbon footprint and the like,” Dallas said. “It’s just the fact that it positions itself to unfairly treat oil sands product or bitumen. We’ve had some good conversations in Europe and we continue to do that.”
The European Union’s controversial “fuel quality directive” requires a 6% reduction in the greenhouse gas intensity of vehicle fuels by 2020. Intensity levels are calculated based on the entire life cycle of the fuel, meaning emissions from the extraction, processing and distribution of the product are included in the final number.
Under the EU formula, oil sands “natural bitumen feedstock” is assigned a greenhouse gas value 22% higher than conventional crude oils. Oliver — who will be making the federal government’s case in Paris, Brussels, and London this week — said that figure is arbitrary and unscientific.
“We have no problem at all — in fact, we support — a policy that has as its objective the reduction of greenhouse gas emissions from the use of hydrocarbons for transportation. However, we think it has to be fair and effective, and the directive as it is currently drafted is fundamentally flawed,” Oliver told the Calgary Herald on Sunday.
The European Council — the EU body that represents individual countries — was originally set to vote on the directive in June 2012. But after intense lobbying by Canada as well as the European oil industry, it delayed the decision to conduct an impact assessment first.
A decision is now expected sometime this year, possibly as late as fall.
While Canada does not currently export oil to Europe, Oliver said he’s afraid of the message that will be sent if Europe’s leaders essentially declare oil sands product to be “dirty” oil.
“What we don’t want is to see our oil stigmatized and potentially hurt our other markets,” he said. “What we don’t want is to somehow see our oil labelled in a negative way.”
Oliver said Canada is being unfairly targeted in part because it is transparent about its greenhouse gas emissions. He said some other oil-producing nations that don’t have strong regulatory and oversight systems are simply assigned an “average” value under the EU formula.
He also said the EU formula appears to go easy on countries that are major oil suppliers for Europe by allowing all types of crude oil — including heavy crudes that Oliver said have similar emissions to oil sands crudes — to be bundled into one “conventional crude” category.
But while Oliver hopes his trip will convince European business and government leaders of the legislation’s flaws, environmental think-tank the Pembina Institute said the fuel quality directive’s science is correct.
A Pembina Institute paper on the topic published last year states that on average, oil sands production produce significantly higher emissions than conventional crude oils.
“The life cycle GHG emissions intensity of oil sands ranges from around 12 to 40% higher than the average intensity of conventional fuels used by Europeans,” the paper’s authors write. “Given this clear distinction, the treatment of ‘natural bitumen’ as a separate feedstock is well justified.”
The Alberta government has also taken up the fight in defence of the oil sands. Alberta’s International and Intergovernmental Relations Minister Cal Dallas and Environment Minister Diana McQueen were in Europe at the end of January to talk about the issue, and Alberta’s U.K. trade office manager will be in Brussels this week to get an update on the EU fuel quality directive.
“Every opportunity we get we’re certainly articulating an Alberta perspective and why we see compelling reasons that the fuel quality directive requires modification to properly position an issue that on principle we support — around lowering the carbon footprint and the like,” Dallas said. “It’s just the fact that it positions itself to unfairly treat oil sands product or bitumen. We’ve had some good conversations in Europe and we continue to do that.”
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