EU faces down tar sands industry

Tar sands, Alberta. Canada, 2008. [Howl Arts Collective/Flickr]

The EU executive has defied intense pressure from governments and lobbyists to include oil from innovative but highly-polluting tar sands within Europe’s Fuel Quality Directive.

Between September 2009 and July 2011, Canadian government and oil industry representatives organised more than 110 lobby events in Brusselsover one per week – and in February, it was reported that Ottawa had threatened a trade war over the issue.

“This could signal the end of an era in which the oil industry enforced their solutions on policy-makers,” Darek Urbaniak, a campaigner for Friends of the Earth told EURACTIV.

Petroleum industry sources declined to comment.

The final vote by the European Commission college on the review of the directive on 4 October was almost unanimous, with only weak opposition within the Brussels cabinet, EU sources said. 

The proposal still needs approval from national governments, but should this happen, tar sands will be ascribed a greenhouse gas default value of 107 grams CO2 equivalent per megajoule (CO2eq/MJ) of fuel, as opposed to the 87.5g CO2eq/MJ average for crude oil, reflecting the greater harm it causes to the environment.

Other unconventional sources were also hit hard, with oil shale being included at a value of 131.3 CO2eq/MJ, and coal-to-liquid at 172 CO2eq/MJ. 

The EU has pledged to reduce the carbon footprint of its fuels by 6% over the next decade.

Hedegaard's victory

The decision was a big victory for Connie Hedegaard, the climate action commissioner, who had held out against the oil sands, which emit substantially more greenhouse gases in production, than conventional oil.

“With this measure, we are sending a clear signal to fossil fuels suppliers,” she told EURACTIV in a written statement. “As fossil fuels will be a reality in the foreseeable future, it’s important to give them the right value.”

Sources close to Hedegaard were delighted at the news, and one noted wryly that as sustainable criteria had been given to biofuels, it was only logical that criteria and a value also be given to fossil fuels.

“This is in full what we were fighting for,” another official said. But the battle to reach a decision in Brussels was a hard one.

“I don’t think this will be well received in Canada,” said Urbaniak.

Trade tensions

Canada possesses 12% of the world’s oil reserves, mostly in the form of oil sands and is the biggest petroleum exporter to the US.

More than that, Ottawa has based its energy strategy on doubling its current tar sands production to export more than 1.8 million barrels of oil to the US a day by 2020.  

To do so, a 1,700-mile pipeline called the Keystone XL would have to be built to carry the diluted bitumen to the Texas Gulf Coast and 740,000 acres of arboreal forest would need to be cut down.

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%.

This would make it all but impossible for Canada to reach its targets for CO2 cuts under the Kyoto Protocol but in 2006, Canada announced that it was withdrawing from the deal.

In that same year, a change of strategic direction was evident when the country's Conservative prime minister Stephen Harper described the country as an "energy superpower" with oil reserves, in the form of tar sands, second only to Saudi Arabia's.

Ottawa became an increasingly strident champion of the unconventional fuel.

Earlier this year, it was reported that a briefing note prepared for Hedgaard by EU officials said that Canada had been intensively lobbying the Commission and member states “in the context of EU-Canada negotiations on a Free Trade Agreement.”

Canadian officials even threatened to scrap the planned deal, according to the report, although Ottawa denied this.   

Rumblings that the inclusion of the tar sands in the Fuel Quality Directive could antagonise EU-transatlantic relations continued last night (5 October), with one US newspaper reporting that a wider trade row could be set to deepen.

Green MEP Satu Hassi hailed the proposal, calling it an important step to ensuring the true environmental impact of this dirty fuel source is recognised and that oil from dirty tar sands does not find its way to European petrol pumps.

"Given the high carbon intensity of oil from tar sands and shale, it is clearly necessary to distinguish these from conventional crude oil. While stricter default values would have encouraged the refining industry to report and improve on their real emissions, the failure to differentiate for tar sands and oil shale under this methodology would have gone blatantly against the greenhouse gas reduction aim of the EU's fuel quality legislation" she said.

"These proposals are draft and face a lengthy process," David Plunkett, Canada's ambassador-designate to the EU told EURACTIV. "Canada is concerned that these proposed rules would unfairly target Canadian oil. We are not opposed to the goal of the Fuel Quality Directive; however, we are opposed to Canadian oil being unfairly discriminated against without scientific justification. Oil sands crude has similar greenhouse gas emissions to many other crude oils imported by Europe. Between 1990 and 2009, oil sands greenhouse gas emissions per barrel were reduced by 29%."

He continued: "The oil sands are a proven strategic resource for Canada that create jobs and economic opportunity for Canadians – and Europeans due to the large number of European companies working in the oilsands. Our government will continue to promote Canada, and the oil sands, as a stable, secure, and ethical source of energy for the world. While of concern, this matter is not linked to our commitment to productive free trade discussions with the European Union."

Greenpeace's EU transport policy adviser Franziska Achterberg welcomed the Commission's move as good news. "Tar sands extraction is a very dirty business for the climate, polluting rivers, lacing the air with toxins and turning forests into wasteland," she said. "Despite coming under intense pressure from oil lobbyists and Canada, the Commission is doing the right thing by wanting to keep tar sands out of Europe to protect the climate.”

The Fuel Quality Directive was adopted to complement the climate and energy package of December 2008. It requires suppliers of petrol, diesel and gas oil used in road transport to reduce the lifecycle greenhouse gas emissions of fuel by 10% by 2020. Since then, the EU has grappled with devising a methodology for calculating greenhouse gas emissions from different types of fuel.

Alberta contains almost 85% of the world's bitumen oil sand reserves, which are heavy pollutants. They are also known as 'tar sands' because of their sticky, tar-like appearance. Because the extraction and processing of these heavy oils, involves huge amounts of energy and water, it has been estimated that they could emit between three and five times more CO2 than conventional oils across their production lifecycle.

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