EU Fuel Standards Become Latest Oil Sand Battlefield for Environmentalists

The latest draft of European Union fuel standards appears to mark a lobbying victory for the Canadian oil industry because it drops tighter restrictions originally envisaged for crude oil derived from Canada's oil sands.

The new draft now being circulated for debate instead calls for the same standard to be applied to all crude oil, regardless of its source, according to Canadian press reports.

The victory for oil sands crude is part of the ongoing battle between the Canadian industry and global environmentalists, who claim that the carbon footprint for the oil sand product is three times higher than for conventional crude, when energy expended on extraction and refining is included.

The industry counters that the oil sand crude releases only 5 to 15% more carbon when it is actually consumed as fuel.

The New York Times reported earlier this month on aggressive efforts by Canadian embassy staff in the U.S. to lobby with state governments in favor of oil sand crude. Besides the need of Midwestern states for Canadian crude, the report said, equipment for oil sand extraction was often built by U.S. workers and a proposed pipeline to deliver crude from Alberta to U.S. destinations would employ thousands of U.S. workers.

The Financial Times reported this week that a group of institutional investors in oil giant BP has proposed a resolution for the next shareholders meeting demanding that the company do more study of environmental risks before embarking on any major oil sand project.

Environmental groups in Canada attributed the change in the EU draft to intense lobbying not only by the provincial government in Calgary but by the Canadian federal government in Ottawa. Canadian officials had argued that trying to distinguish the source of crude would be difficult and would create an obstacle to trade given the integrated nature of the North American energy market.

"The powerful oil lobby has the Canadian government doing its dirty work again," John Bennett, executive director of Sierra Club Canada, said in a statement. "Canada should be developing a policy to reduce greenhouse gas emissions and work with the European Union to create a binding international agreement, not threatening trade sanctions to protect the interests of multinational oil companies."

The fuel standards will be under discussion for several more months and environmental groups pledged to seek reinstatement of tighter restrictions on the oil sand crude.

By. Darrell Delamaide