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TORONTO and CALGARY and BRUSSELS — The European Union appears to be backing away from a contentious fuel regulation that would hit oil sands producers, as governments there worry increasingly about their dependence on Russian energy imports.
Prime Minister Stephen Harper – in Europe this week – has won backing from key allies, including Britain, Poland and Italy, to deepen the Canada-EU energy relationship in order to enhance security of supply.
“There obviously has been some discussion here about energy security,” Mr. Harper told reporters after G7 talks in Brussels Thursday. “Our energy ministers, Natural Resources Minister [Greg] Rickford among them, met within the last month to have a very in-depth discussion of how we can move forward to enhance our energy security for the Western world generally.”
The European Commission has removed the most contentious part of the fuel quality directive that would impose new hurdles for Canadian imports, and would instead require refiners to report emissions on their feedstock regardless of the source of the crude, according to a draft document seen by Reuters news service.
The apparent change in policy would represent a much-needed win for Canada’s oil sands sector, which has been forced to defend its operations and environmental record against an onslaught of critics opposing both development of the massive northern Alberta resource and the pipelines needed to move it to market.
The Harper government, along with the government of Alberta and the oil industry, has long argued that the proposed European standard would unfairly single out Canadian oil sands crude for its carbon-intensity, while benefiting producers from countries such as Russia and Nigeria despite their questionable environmental practices. And with the ongoing crisis over Russia’s incursions into Ukraine, Canada argues Europe should be embracing its oil as a secure form of energy.
“We don’t see the crisis in Ukraine as simply an opportunity to market Canadian products, but obviously we’re deeply engaged in a discussion with our allies on how we can make sure that globally our energy supplies are secure and stable,” Mr. Harper said.
While the new proposal would not target oil sands crude, it would still require companies to report on the emissions profiles of the various crude sources they use. And it proposes a review in 2016 to determine whether to impose emissions standards based on the feedstocks.
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