EU Oil Sands Policy Likely To Get Ministers' Attention

BRUSSELS - European Union experts Thursday failed to reach a majority view on a proposal by the European Commission that would discriminate against the use of crude from oil sands, pushing the issue up to ministerial level, the commission said.

They were voting on an proposed update to the so-called Fuel Quality Directive, a piece of EU law that encourages the use of cleaner fuels, as part of a broader EU effort to cut greenhouse gas emissions, by setting a specific target to cut emissions from transport fuels and ranking fuels according to their carbon dioxide emissions.

But the experts--technocrats from national capitals meeting here specifically for the vote--weren't able to reach a large enough majority to back the proposal, effectively pushing the debate up to the ministers' level, the commission said.

"The committee has issued a no-opinion, which means no qualified majority in favor and no qualified majority against" the proposal, said Isaac Valero Ladron, spokesman for EU Climate Commissioner Connie Hedegaard--a strong supporter of the proposal.

"The political discussion will continue," he said, adding that ministers might take a decision by June.

People familiar with the discussion told Dow Jones Newswires Wednesday that key countries like the U.K. and France were skeptical about the proposal. The U.K., the Netherlands and Italy have put forward alternative plans, the people said.

The commission's proposal would penalize the use of oil from sands because it considers that extracting this oil emits more CO2 than extracting conventional oils. This would prompt companies to shift away from oil sands and turn to cleaner fuels to meet the emissions target set in the legislation.

The issue has escalated because it is interfering with negotiation of a free trade agreement between the EU and Canada, which is one of the main global producers of oil from sands. Canada has threatened to take the bloc to the World Trade Organization if it proceeded with its legislation. The U.S. is also following the debate very closely as it uses oil from sands to refine into fuel that it exports to Europe.

Canada's Western province of Alberta is estimated to hold around 170 billion barrels of proven oil reserves, placing it third in the world behind Saudi Arabia and Venezuela. Buried just below Alberta's boreal forest, the oil is a mixture of quartz sands and bitumen--a thick, tarry form of crude. But turning it into oil is an energy-intensive process that emits large amounts of CO2, a greenhouse gas that scientists say contributes to climate change.

Canada objects to putting oil-sands crude into a separate category from other fuels. It says that is unfair and doesn't recognize that some of the sources of EU imports produced higher emissions still, but these hide their performance by being lumped into standard fuel categories.

Canada's exports of oil sands crude to Europe are negligible, but Ottawa fears that any EU legislation singling out the fuel could set a precedent, encouraging oil sands critics in other jurisdictions--particularly in the U.S., the Alberta oil industry's main export market--to push for similar measures.

Copyright (c) 2012 Dow Jones & Company, Inc.


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howard | Feb. 24, 2012
I'd be fine with the Canadians figuring out a way to sequester and isolate the Carbon in the CO2 and freeing up the O2 and getting on with this... After all they have the energy right there.

Phil Miller | Feb. 23, 2012
Before this resolution is passed, one would be needed that severely controls the use of coal as an energy source for any purposes. This of course will never pass, so neither should this proposal.

cpatton | Feb. 23, 2012
I don't see why the U.S. and Canada don't just use these oils and forget the rest of those countrys,this stuff will have to be used in time anyway,why not use it now even with higher COS. If we would stop worrying about what everyone else thinks, maybe we could get this country back on track. How long is it going to take for the U.S. to pull their head out? We are a nation built on guts,sweat,and the ability to think for ourselves, lets get back to it!!!

Ron Souther | Feb. 23, 2012
So this means the other Oil Sands Projects in the world are dirty oil. i.e. Venezuela Oil Sands Presently Shipped world wide.

Brian Dirk | Feb. 23, 2012
I feel it is more important to develop the oil sands in Canada to totally help the economy which in turn would help everybody as well as increase the employment which would further help our economy. I do believe that the Oil Sands has absolutely no effect on the Ozone. The greatest effect on our Ozone is not from the Oil Sands but from the coal used to balance the difference regarding the oil not being used for power and heat at this time. It is but a few people that try to justify their jobs as environmentalists in our country. They really have no justification to what they are saying to the world at this time.

j beigh | Feb. 23, 2012
A Moment of Truth. Pragmatism indicates we will go scorched earth for the last drop. I doubt we will stop and not produce the most heinous types from the most marginal sources. As Bush II said, we are like addicts-we are addicted to oil. Omitted from the press release was the mention of the H20 inputs/ use. Its not quite as counterintuitive as corn ethanol, but its right up there. Next stop: shale oil in arid western colorado, the land of over-claimed, non existent surplus water for a new industrial use. Yee Ha!


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