Canada’s tar sands lobbying gets murky

Alberta tar sands, Canada.

A row has broken out over a Canadian lobbying mission to the British Foreign Office that opposes the EU’s proposed Fuel Quality Directive. The dispute involves apparently inaccurate information about California’s fuel quality regulations and threats of legal action.

In an internal UK Foreign Office e-mail reporting the meeting and seen by EURACTIV, Canada’s trade commissioner in the UK, Sushma Gera, reportedly told British officials that “lawyers were looking at a potential WTO case” against the EU.  

She said Canada had support from Spain, Estonia and Poland in its opposition to the EU’s proposed default fuel values for the oil sands – also known as ‘tar sands’ – and that the Dutch would propose an alternative option.

Yesterday (6 December), Ottawa also announced that it would not renew its commitment to the Kyoto Protocol when it expires in 2012.

According to the letter, Canada has ruled out linking the tar sands issue to discussions with Brussels on an EU-Canada Comprehensive Economic and Trade Agreement (CETA) that have been ongoing since 2009. 

But environmentalists contacted by EURACTIV expressed outrage at Canada’s backdoor lobbying efforts, particularly a claim in the emailed minutes that a Californian attempt to implement a comparable low carbon fuel standard (LCFS), had collapsed.

Gera is quoted in the e-mail as saying that “the US consideration of similar measures had just failed, as it was ‘unimplementable.’”

This is not the case, and on 30 November, California's Air Resources Board sent a reaction letter to the EU Climate Action Commissioner Connie Hedegaard, seen by EURACTIV, explaining that their fuel standard had not failed and was indeed ongoing.

'Robust' regulation

“We believe that a robust greenhouse gas (GHG) regulation to address transportation fuels like LCFS must account for differences in the carbon intensity of crudes,” the letter says.

“The principle of accounting for the lifecycle GHG emissions of transportation fuels, including those associated with the production and transportation of crude oil continues to be an important feature of the LCFS,” it says.

California’s LCFS, which was implemented at the beginning of this year, obliges a 10% reduction in the carbon intensity of the state’s transport fuels by 2020.

“With time running out to reverse global greenhouse emissions, the world needs high-emitting crude pushers like Canada about as much as a hole in the head,” Mark Johnston, a senior policy advisor for the World Wildlife Fund, told EURACTIV.

“Canada should stop interfering in a European decision on pollution standards here in Europe, particularly if some its claims are false or misleading,” he added.

The EU has proposed assigning fuel from Canada’s tar sands a default value almost 20% higher than for average crude oils, to help meet Europe’s target of reducing the carbon intensity of its fuel by 6% by 2020.

“The oil industry has been trying to give European policymakers cold feet by spreading misinformation about California's law,” said Nusa Urbancic of the environmental group Transport and Environment. “But they've been caught red-handed.”

Heavy crudes

EURACTIV understands that British diplomats feel frustrated that what they see as a routine meeting to set the backdrop for a Cabinet decision is causing public relations blowback for the Foreign Office.

A Foreign Office spokesperson told EURACTIV: “We want to see all heavy crudes dealt with using a robust, scientific methodology, which takes into account the greenhouse gas emissions associated with all sources, and not solely highlighting the greenhouse gas (GHG) emissions associated with oil sands.

“We regularly raise our concerns over the environmental impact of oil sands extraction with the Canadian authorities,” she added.

According to one study, the exploitation of oil reserves in Canada and North America could increase global atmospheric CO2 levels by as much as 15%. 

However, the tar sands are central to Canada's energy strategy.

In 2009, Canada’s then natural resources minister, Lisa Raitt, complained that the fuel could be “discriminated against as a high [carbon-intensity] crude oil, while other crude oils with similar upstream emissions are not singled out.”

Ottawa has raised the same objection about the EU’s Fuel Quality Directive, implicitly arguing that the move is a barrier to free trade, and even hailing the fuel as "a great Canadian development."

But a Stanford University report for the EU found that greenhouse gas emissions from the tar sands production were “significantly different enough from conventional oil emissions that regulatory frameworks should address this discrepancy with pathway-specific emissions factors that distinguish between oil sands and conventional oil processes.”

Between September 2009 and July 2011, Canadian government and oil industry representatives organised more than 110 lobby events in Brussels – over one per week – to promote the tar sands industry.

The EU’s Fuel Quality Directive requires that energy providers reduce by 6% the greenhouse gas emissions of the fuel they put on the market, through methods such as reducing flaring or increased use of biofuels.

On 4 October the European Commission voted on a review of the Fuel Quality Directive which assigns a default value 107 grams CO2 equivalent per megajoule (CO2eq/MJ) for oil produced from tar sands.

This figure is higher than that assigned for other crude oils, 87.5g CO2eq/MJ average, because oil extraction from tar sands is more carbon intensive. This led Canada, which has the world’s largest reserves of oil sands, to protest the EU’s action.

Other unconventional sources of fossil fuel would also be hit hard by the proposal, with oil shale being included at a value of 131.3 CO2eq/MJ, and coal-to-liquid at 172 CO2eq/MJ.

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