Ottawa challenges EU fuel quality directive that targets oil sands

Ottawa challenges EU fuel quality directive that targets oil sands.

August 9, 2013   by CANADIAN PRESS

Aerial view of an oil sands operation in Alberta. Photo: GFWC

OTTAWA, Ont. — The science behind a European fuel-quality directive that slams Canada’s oil sands is being targeted by the Harper government, which is seeking an independent review of the findings in its latest shot against the measure.

The European Union directive, which would favour low-carbon fuels, would penalize Canadian bitumen on the grounds that crude from the oil sands is the most harmful to the Earth’s climate.

The federal Natural Resources Department is now seeking a company to carry out a study on pollution from crude oil.

“The Fuel Quality Directive, as currently drafted, is not based on science and so discourages disclosures and will not achieve its stated objectives,” Natural Resources Minister Joe Oliver said in an e-mail to The Canadian Press.

“This independent analysis will provide the scientific foundation to render the Directive objective and effective.”

The European Union has given a greenhouse gas intensity value to fuel derived from the oil sands that is 22% higher than conventional crude.

This makes the Alberta fuel less attractive to the European market because it is categorized as more polluting.

The assertion has drawn the ire of Ottawa, which has been fighting to get Europe to withdraw the directive.

The successful bidder for the federal government study is expected to review the analysis by a consortium made up of European Commission researchers and researchers who follow the auto and gas industries.

It is supposed to determine if the data and methodology are “sufficiently robust” and, if not, it would suggest a “more accurate” intensity value, says the Natural Resources online bid solicitation.

The challenge isn’t worrying the Europeans.

“The proposal that the Commission put out, according to us, is very scientific,” said Nusa Urbancic, with the Brussels-based Transport & Environment NGO. She says she believes the joint research committee’s findings are valid.

Oliver argues that Europe does not take into account that some crudes are heavier than others and therefore more polluting. They are lumped into the same category of conventional crude.

In Canada, the Pembina Institute supports the categorization because the average greenhouse gas emission of conventional oil is clearly lower than the oil sands natural bitumen.

“Even comparing the oilsands with a subset of the heaviest crudes entering Europe . . . there is a clear difference between averages. Given this clear distinction, the treatment of ‘natural bitumen’ as a separate feedstock is well justified,” Pembina said in a report on the subject in March 2012.

The company that wins the survey contract, which is worth a maximum of $200,000, will have to work quickly. A final report is expected no later than Sept. 27.

NDP spokesman Peter Julian says the government is just wasting money by commissioning the survey.

“No matter how they try to fake a study and attack the Europeans, it will not change the fact that Canada has a very bad reputation because of the government’s actions,” he said.

Oliver has already visited several European countries to try to convince them to drop the fuel directive. He also threatened to complain to the World Trade Organization if they implemented it but he later tempered his remarks.

Urbancic indicated the warning was a bit much for the Europeans.

“I think he went too far by threatening Europe with the WTO,” she said. “It was a little out of place.”

Oliver has also written to European Climate Commissioner Connie Hedegaard, reiterating his view that the directive has no scientific basis.

“We recommend that an objective, expert third party organization, such as the International Energy Agency, conduct a comprehensive impact study, including a scientific analysis of the emission levels of different crude oils,” he wrote.

© 2013 The Canadian Press

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