There is a way to clean up ‘dirty’ oil’s problems – by Jeffrey Simpson (Globe and Mail – February 25, 2012)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

Canada’s bitumen resources have a problem, and neither the companies that wish to exploit bitumen or the governments trying to help them seem to understand it.

Bitumen, from which oil is produced, takes more energy per barrel to get at than conventional oil pumped from the ground. Because it needs more energy, bitumen-derived oil produces more greenhouse gas emissions that cause global warming than conventional oil.

That gap – between bitumen-derived and conventional oil – is the problem the industry and governments don’t seem to get. And that gap will widen as more steam-driven in-situ production comes on line, since in-situ uses more energy than open-face mining of bitumen.

There’s not much the oil industry can do about opponents who don’t like any fossil fuels and seek their elimination. These opponents are going to do what they can in an open society to stick spokes in the industry’s wheels.

They can do so in a free society in a way not available in dictatorships, autocracies, kingships and other authoritarian regimes. It’s the price Canada (and other democracies) pay for something called freedom within the law.

But there’s another group of opponents that could be assuaged if that gap were eliminated. These people know that the demand for oil will remain considerable around the world and that renewable energy cannot meet it. A market will therefore exist for oil from bitumen, but they worry about the gap. They are the ones who label bitumen-derived oil “dirty oil,” and they are not going away.

That gap led people in the European Union (where climate change is taken more seriously than in Canada) to propose modifying a fuel standard to make refiners and marketers reduce the carbon content in their fuels. The new standard would have singled out bitumen-derived oil because it was more carbon-intensive in emissions. One study, from Stanford University, used by the European Commission, put the gap at 22 per cent.

An EU committee deadlocked Thursday over the proposed designation of bitumen-derived oil. The matter now will be kicked up to EU ministers, where Canada’s lobbying efforts will be directed. The European market doesn’t matter much for the bitumen folks. They’re worried that a European precedent might embolden certain U.S. states to discriminate against bitumen-derived oil because of its dirtier quality.

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