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Why Europe Won't See Canadian Crude Anytime Soon

By Daniel J. Graeber | Fri, 31 January 2014 23:21 | 1

Environmental groups in the European Union said they would consider taking a complaint against the European Commission to a top court in Luxembourg for reneging on a measure that labels Canada's more viscous grade of crude oil as highly polluting. Canada said it wants to expand its export market, but overseas obstacles and national trade policies could keep much of its crude out of Europe.

Nusa Urbancic, a clean fuels director at Transport & Environment, a European environmental group, said EU policy should encourage the use of fuel sources that have low emissions.

"Europe needs to decarbonize its transport fuels in the most efficient way possible," she said in a statement. "Allowing dirty tar sands to flood into Europe is going to raise emissions, not lower them."

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Transport & Environment joined Friends of Earth Europe and Greenpeace in arguing the European Commission hasn't put a policy into practice that would label Canadian and other non-conventional forms of crude oil as highly polluting.

EU leaders in January unveiled a climate agenda that calls for a 40 percent reduction in greenhouse gas emissions from 1990 levels by 2030. Its currently policy calls for a 20 percent reduction based on the 1990 benchmark by 2020.

Environmental groups say the type of crude oil found in Canada is more carbon intensive than rival grades. Groups like Transport & Environment back arguments from environmental groups in the United States, which say using the heavier grade of Canadian crude oil undermines efforts to advance a low-carbon economy.

Canadian Natural Resources Minister Joe Oliver challenged those claims by pointing to a report from energy consultant ICF International, which said European assessments of emissions singled out Canadian crude as a highly polluting form of oil.  European assessments, Oliver said, were "unscientific and discriminatory."

Last week, Canadian Minister of International Trade Ed Fast said Canada is an energy trading nation that needs to expand beyond its conventional consumer base.

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"That’s why our government continues to work hard to open new markets and trade routes for our priority export commodities," he said.

Crude oil in 2012 was Canada's No. 1 export commodity and energy exports overall valued more than $100 billion.  Canadian Prime Minister Stephen Harper, who in the past has courted energy-hungry Asian investors, took his oil message to Europe last year, saying it was time to stop discriminating against Canadian crude.

The international trade minister said crude oil exports are on pace to grow by more than 8 percent, though 91.4 percent of all Canadian energy exports head currently to the United States. Groups like Transport & Environment say they hope it stays that way. For U.S. markets, a decision on more Canadian crude hinges on President Obama's decision on the Keystone XL pipeline. Europe, however, shouldn't worry.  Under a global market action plan adopted by the Harper administration, the priority markets for Canadian energy exports are Brazil, China, India, Japan, South Korea and the United States.

By. Daniel J. Graeber of Oilprice.com

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  • luc on February 03 2014 said:
    The EU should not have access to Canadian oil if it was the last oil on earth. Enough.

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