The federal government is mounting a last-ditch bid to derail a proposed European fuel standard that would label crude from Canada’s oil sands as the most harmful to the planet's climate.
Natural Resources Minister Joe Oliver flew to Paris on Tuesday for a meeting of the International Energy Agency, and will proceed from there to London. He plans to urge his French and British counterparts to oppose the European Commission’s current fuel quality directive, which aims to reduce greenhouse gas emissions in the transportation sector by 6 per cent.
Ottawa and the oil industry are battling a high-stakes public relations war over the environmental impact of the oil sands, with opponents arguing development should be slowed, if not halted entirely, in order to avoid a sharp increase in greenhouse gas emissions.
In an interview, Mr. Oliver suggested the EU was being hypocritical in singling out oil sands crude – which it does not import – but not heavy oil from Saudi Arabia and Nigeria, which is nearly as bad in terms of greenhouse gas emissions and which they do import.
“We’re obviously very concerned that the commission would single out oil sands from all other crude sources and we hope to get the countries on side on this issue,” the minister said.
“We don’t object to the fuel quality directive’s goal of reducing greenhouse gas emissions from transportation fuels. But we do object to discriminatory treatment that singles out oil sands without scientific justification.”
He said Canada “won’t hesitate” to take action to defend its interests, including a challenge to the World Trade Organization.
The Canadian government has lobbied furiously to win support for TransCanada Corp’s proposed Keystone XL project, arguing that the oil sands is not much worse in terms of emissions than other sources of heavy oil, and represents a secure supply of crude for the United States.
Mr. Oliver will make similar arguments to European colleagues, saying the expanding oil sands is an important supply source for world markets. And he argues that the emissions gap between oil sands and the other sources of heavy crude is relatively small and is narrowing.
While the EU fuel directive will not directly affect Canadian producers, it would set a troubling precedent for the industry, which is facing increasing environmental pressure.
In the United States, critics have focused on the Keystone XL pipeline, which would transport oil sands crude from Alberta to the U.S. Gulf Coast.
The New York Times this week posted on its website a video op-ed by actor Robert Redford, in which he calls on President Barack Obama to block the Keystone XL project. Mr. Redford, who is a trustee with the Natural Resources Defense Council, labelled the “tarsands” the “dirtiest oil on the planet.”
Scott Sinclair, a research fellow for the Canadian Centre for Policy Alternatives, said Ottawa would have a tough time challenging the fuel quality directive at the WTO because the regulation establishes an emissions value – 23 per cent above conventional crude – for all oil sands and shale oil sources, and not just Canadian production. While Canada is the only current oil sands producer, other countries are pursuing development, notably Venezuela, which has had its vast Orinoco oil sands reserves officially recognized.
Mr. Sinclair said the Europeans will have to be certain as they negotiate a Canada-EU trade agreement to ensure the fuel quality directive is protected.