Skip to main content

Joe Oliver, Canada's Minister of Natural Resources is photographed during press conference on June 25 2013.Fred Lum/The Globe and Mail

The federal government launched a new broadside Wednesday against European plans to target the oil sands as the EU moves to cut greenhouse gas emissions in its refining sector.

Natural Resources Minister Joe Oliver released a new report commissioned by his department that argues the methodology used to create the fuel quality directive was deeply flawed.

"Unfortunately, the FQD implementation measures, as currently drafted, are unscientific and discriminatory; would discourage disclosure; harm the European refinery industry, and not achieve its environmental objective," Mr. Oliver said in a release Wednesday.

The Harper government has campaigned aggressively against the European proposal, which assumes that gasoline produced from oil sands bitumen results in 23 per cent more greenhouse gas (GHG) emissions than conventional crude.

Ottawa has threatened to take the EU to the World Trade Organization if the regulations pass as drafted, even as the two sides conclude a free-trade agreement meant to ensure liberalized trade flows.

Under the EU plan, refiners would have to reduce the GHG intensity of the fuels they supply by 6 per cent by 2020.

If passed, the directive would create a major disincentive for refiners to import crude from Canada, even as oil sands producers hope to reach Atlantic basin markets via TransCanada Corp.'s proposed Energy East pipeline to Saint John, N.B. It would also discourage the European imports of diesel from the U.S. Gulf Coast refiners who process oil sands crude.

A vote on the directive in the European Parliament is pending, but the process has been delayed by European Commission president Jose Manuel Barroso. However, the European Parliament approved a motion endorsing the plan in advance of the United Nations climate summit being held in Warsaw this week.

The Canadian report, by Ottawa-based consultant ICF Consulting Canada Inc., echoes many criticisms levelled against the fuel quality directive by the oil industry and the federal and Alberta governments.

The draft regulations set a "default value" for the carbon intensity of three broad categories of crude: conventional, oil sands and oil shale. But the ICF report says those categories belie the reality that some conventional crude are just as carbon-intensive as the oil sands, due to flaring of natural gas, inefficiencies in the production processes and transportation.

"GHG intensities of conventional crude oils fall on a continuum, not just one value," it concluded, "and some light and heavy conventional crudes have GHG intensities that are similar or even higher than those of crudes derived from natural bitumen."

It added that the directive would allow European refiners to import high GHG-intensity crude from Russia, Nigeria and Venezuela as "conventional oil," a move that would increase emissions on the continent rather than decrease them.

But Hannah McKinnon, a researcher at Toronto-based Environmental defence, said the report appears to be a rehash of previous criticism from Ottawa. "They've made these complaints before and they've all been addressed," Ms. McKinnon said.

She added the Canadian strategy appears to be aimed at delaying a vote on the regulations until after the European parliamentary elections next spring.