• 2 days Iraq Begins To Rebuild Largest Refinery
  • 2 days Canadian Producers Struggle To Find Transport Oil Cargo
  • 2 days Venezuela’s PDVSA Makes $539M Interest Payments On Bonds
  • 2 days China's CNPC Considers Taking Over South Pars Gas Field
  • 2 days BP To Invest $200 Million In Solar
  • 2 days Tesla Opens New Showroom In NYC
  • 2 days Petrobras CEO Hints At New Partner In Oil-Rich Campos Basin
  • 2 days Venezuela Sells Oil Refinery Stake To Cuba
  • 3 days Tesla Is “Headed For A Brick Wall”
  • 3 days Norwegian Pension Fund Set to Divest From Oil Sands and Coal Ventures
  • 3 days IEA: “2018 Might Not Be Quite So Happy For OPEC Producers”
  • 3 days Goldman Bullish On Oil Markets
  • 3 days OPEC Member Nigeria To Issue Africa’s First Sovereign Green Bond
  • 3 days Nigeria To Spend $1B Of Oil Money Fighting Boko Haram
  • 3 days Syria Aims To Begin Offshore Gas Exploration In 2019
  • 3 days Australian Watchdog Blocks BP Fuel Station Acquisition
  • 4 days Colombia Boosts Oil & Gas Investment
  • 4 days Environmentalists Rev Up Anti-Keystone XL Angst Amongst Landowners
  • 4 days Venezuelan Default Swap Bonds At 19.25 Cents On The Dollar
  • 4 days Aramco On The Hunt For IPO Global Coordinators
  • 4 days ADNOC Distribution Jumps 16% At Market Debut In UAE
  • 4 days India Feels the Pinch As Oil Prices Rise
  • 4 days Aramco Announces $40 Billion Investment Program
  • 4 days Top Insurer Axa To Exit Oil Sands
  • 5 days API Reports Huge Crude Draw
  • 5 days Venezuela “Can’t Even Write A Check For $21.5M Dollars.”
  • 5 days EIA Lowers 2018 Oil Demand Growth Estimates By 40,000 Bpd
  • 5 days Trump Set To Open Atlantic Coast To Oil, Gas Drilling
  • 5 days Norway’s Oil And Gas Investment To Drop For Fourth Consecutive Year
  • 5 days Saudis Plan To Hike Gasoline Prices By 80% In January
  • 5 days Exxon To Start Reporting On Climate Change Effect
  • 6 days US Geological Survey To Reevaluate Bakken Oil Reserves
  • 6 days Brazil Cuts Local Content Requirements to Attract Oil Investors
  • 6 days Forties Pipeline Could Remain Shuttered For Weeks
  • 6 days Desjardins Ends Energy Loan Moratorium
  • 6 days ADNOC Distribution IPO Valuation Could Be Lesson For Aramco
  • 6 days Russia May Turn To Cryptocurrencies For Oil Trade
  • 6 days Iraq-Iran Oil Swap Deal To Run For 1 Year
  • 9 days Venezuelan Crude Exports To U.S. Fall To 15-year Lows
  • 9 days Mexico Blames Brazil For Failing Auction

Breaking News:

Iraq Begins To Rebuild Largest Refinery

Alt Text

Is This The Top Of The Oil Market?

A surge in gasoline inventories…

Alt Text

The Oil And Gas Industry Is Under Attack

The global oil and gas…

Alt Text

The Uncertain Future Of Natural Gas

Natural gas has played a…

John Daly

John Daly

Dr. John C.K. Daly is the chief analyst for Oilprice.com, Dr. Daly received his Ph.D. in 1986 from the School of Slavonic and East European…

More Info

Canadian Oil Sands - A Good Investment? Not in Europe, Apparently

Canadian Oil Sands - A Good Investment? Not in Europe, Apparently

Any American watching cable TV over the past few months can hardly fail to have noticed the seemingly ubiquitous advertisements extolling the virtues of extracting oil from Canadian oil sands, which the commentators assure their audience has a carbon footprint largely comparable with traditional fossil fuels, and which, if developed will provide not only millions of new jobs but billions of dollars for governments as well as energy security by weaning the Western Hemisphere off its addiction to terrorism-tainted Middle East oil.

But don’t break out your checkbook just yet.

Apparently those pesky Eurocrats in Brussels haven’t gotten the message, as on 4 October the European Commission proposed that oil sands crude be ranked as a dirtier source of fuel compared with oil from conventional wells.

The move has unsettled Ottawa, as all of the world’s oil sands reserves are in northern Alberta and Saskatchewan. While Canada does not currently ship any of its oil sands production to Europe, the Canadian energy industry is alarmed that Europe’s green anti-oil-sands policy could influence other global areas, such as Asia, where Canada hopes to develop a market for its oil sands crude exports.

Canadian Association of Petroleum Producers vice-president of oil sands and markets Greg Stringham said, “The concern for us is one of principle and precedent. The importance of it in the EU for us is that it could set a precedent on which others then build their policies,” adding that the EU is playing favorites, as it imports oil from Nigeria and Russia, whose energy products have similar greenhouse gas emissions as oil sands.

The European Commission's decision came after lengthy internal debate, but the body ended up recommending that oil sands-derived fuel be given a greenhouse gas rating of 107 grams per megajoule, roughly 20 per cent higher than the 87.5 grams assigned to fuel from conventional crude oil. A bill containing a fuel-quality directive (FQD) targeting oil sands imports is due to be presented to the European Parliament for a vote later this year.

It’s a largely symbolic gesture, as according to Canada’s National Energy Board, 98.5 percent of Canada’s first quarter 2011 oil sands exports went to the United States.

But it’s the principle of the thing, and Ottawa is now threatening to retaliate in the area of Canadian-EU bilateral trade, a not insignificant concern, as last year the EU imported about $26.8 billion of Canadian goods, while Canada took roughly $35.6 billion of EU imports.

Canadian Natural Resources Minister Joe Oliver while visiting Washington thundered against the European Union, saying the action would be "discriminatory" and could trigger a challenge before the World Trade Organization, adding, "Should the European Union implement unjustified measures which discriminate against the oil sands, we won't hesitate to defend our interests. They are doing it believing, apparently, that there is no downside."

In a more conciliatory tone Oliver noted, "The government of Canada does not object to the fuel quality directive goal of reducing emissions for transportation fuels. However, we do object strongly to discriminatory treatment that singles out oil sands-derived fuels without scientific justification... We don't like the potential stigmatization and we don't think it is justified."

Not every Canadian is incensed with the European Commission’s actions however. Climate Action Network Canada Executive Director Graham Saul said that the decision "sends a clear signal that no amount of aggressive lobbying can counter the scientific fact that tar sands are one of the world's dirtiest fuels."

But left unsaid is that the larger issue for Canada is not either the EU or even Asia, but – the U.S., where opposition is rising dramatically to Calgary-based TransCanada Corp.'s proposed $7 billion Keystone XL pipeline, which would transit up to 830,000 barrels of oil per day from Hardisty, Alberta, to refineries on the Gulf Coast of Texas. Environmental groups in such stalwart Republican states as Nebraska are up in arms over the proposal, fearing that a leak from the underground pipeline would irrevocably pollute the Ogalla Aquifer, source of much of the Great Plains’ agricultural water.

In weeks of protest in Lafayette Square opposite the White House, more than 1,250 demonstrators have been arrested objecting to the pipeline. So the Canadian government is essentially venting its frustration on Europe while keeping its eyes firmly focused on Washington, where the real battle has begun. It’s enough to put a patriotic Canadian right off his croissant – unless it’s made in Quebec.

By. John C.K. Daly of Oilprice.com




Back to homepage


Leave a comment
  • Anonymous on October 11 2011 said:
    Oil-Sand investors are going to lose their shirts because there is a new clean energy technology that is 1/10th the cost of coal. Don’t believe me? Watch this video by a Nobel prize winner in physics: http://pesn.com/2011/06/23/9501856_Nobel_laureate_touts_E-Cat_cold_fusion/Still don’t believe me? It convinced the Swedish Skeptics Society: http://www.nyteknik.se/nyheter/energi_miljo/energi/article3144827.eceLENR using nickel. Incredibly: Ni+H+K2CO3(heated under pressure)=Cu+lots of heat. Here is a detailed description of the device and formula from a US government contract: www.lenr-canr.org/acrobat/GernertNnascenthyd.pdfBy the way, here is a current survey of all the companies that are bringing LENR to commercialization: http://www.cleantechblog.com/2011/08/the-new-breed-of-energy-catalyzers-ready-for-commercialization.html
  • Anonymous on October 11 2011 said:
    I think the message here is that Canada needs to sit on the oil sands development a bit longer. There really is no downside to Canada maintaining this asset as a resource for tapping in the future. The long-term trajectory for oil prices is up, up, up. The world isn't producing new oil at a replacement rate, and there are no viable alternatives that pack energy at such a dense rate. In 5 years, Canada will get more for oilsands oil than we do today. Wait 10 years and the premium will be even higher. In a worst case scenario, where global trade still suffers, it would be great to be Canadian and have more oil for our country and for sale to the US.Is there really a downside to waiting? I fail to see the problem.

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News