Over the past several years, Canada’s diplomats abroad have been engaged in an extensive and coordinated defense of the oilsands. They have been armed with speaking points developed with the oil lobby’s help, and even given license to threaten a “trade war.” Nowhere has this campaign been more intense than in Europe, where the European Union (EU) is poised to implement climate change policy that clearly labels oilsands imports as a more polluting source of oil than conventional crude.
The policy in question is the fuel-quality directive, part of the EU’s commitment to reduce greenhouse gas pollution from transportation 20 per cent by 2030. To help fulfill this goal, suppliers of transportation fuels are obliged to reduce the pollution intensity of their products, including gasoline, diesel and jet fuel. The pollution intensity of oil is measured over the life cycle of the fuel, which involves adding up all the pollution from extracting the oil, refining it, moving the fuel to market and ultimately burning it in cars and trucks.
While little Canadian oilsands crude is currently (or projected to be) exported to the EU, the federal government and oilsands industry have been concerned nonetheless that the directive’s discrimination of oilsands based on its higher pollution intensity will set a precedent that other markets may follow.
Last week the European Commission’s fuel quality committee, which had been tasked with developing the details for implementing the directive, held a vote on whether to approve the pollution intensity rankings. But, as with so many issues that suddenly find themselves in the political spotlight, the vote turned into a non-event — with a “draw” on the vote punting a final decision until June, when EU ministers (rather than the committee’s technical experts) will determine the directive’s fate.
Predictably, all sides claimed victory — although it’s noteworthy that if the directive were going to be quashed, having technocrats do so at the committee level would be far easier than having elected officials doing so in the full glare of the media spotlight.
Apparently buoyed by the stalemate, federal Natural Resources Minister Joe Oliver promised that Canada would not let up on its lobbying efforts. But is that really in Canada’s best interest?
As numerous commentators have observed, climate change policy is going to discriminate against greenhouse gas pollution, and the oilsands are irrefutably more polluting than most sources of transportation fuel. The fuel-quality directive doesn’t discriminate against Canada; rather it is premised upon a peer-reviewed scientific comparison of the pollution intensity of different sources of oil entering Europe that assigned a benchmark value for conventional oil and “natural bitumen” (i.e. oilsands). Any oilsands company that can perform better than the benchmark value can submit its data and receive its own independent value, creating an incentive for oilsands companies to more aggressively reduce their pollution.
Critics of the directive raise some valid opportunities for it to be made both more effective and fairer. These improvements should not serve as rationale for delay, but can be addressed through the built-in review of the directive that is to occur by 2015. For example, requiring greater data collection and transparency from all oil producers would ensure the directive is based on and implemented with the best available information. Further, since there is a broad spectrum of oil sources and associated pollution intensities, distinguishing between a greater number of oil feedstocks would ensure that the directive is preferential to the lowest polluters.
Unfortunately, it doesn’t appear that the government’s diplomatic troops are advocating for any such improvement — they are quite simply and clearly lobbying against the notion that Canadian oil would be discriminated by virtue of its pollution.
It’s clear that the world is shifting towards a lower-carbon future. Whether and how Canada positions itself to compete will have significant implications for our economy — including the oilsands sector — in the years ahead.
The interests of Canadians, both at home and abroad, would be far better served if the federal government were to focus less on opposing climate change policy elsewhere, and more on delivering effective actions to reduce pollution here at home. Status quo oilsands production is already starting to close market doors for the industry, but this need not be the case. As diplomats and the oil industry alike have advised the government, the best defense of the oilsands is a good offense against pollution — unfortunately, the innovation we keep hearing about that promises to reduce emissions from oilsands production is not arriving quickly enough.
Until the government puts in place policies that deliver real pollution reductions, its diplomats and the oilsands industry will face an ever-increasing struggle to justify Canada’s high-carbon energy production to our potential customers. With our international reputation in a state of decline and pollution from the oilsands on the rise, it’s time to bring our diplomatic defenders of the oilsands in from the cold and get to work reducing oilsands’ pollution.
-30-
Dan Woynillowicz is director of strategy and communications at the Pembina Institute, a national non-partisan sustainable energy think-tank. He has authored numerous reports on oilsands and climate change policy and holds a MA in environment and management. The Pembina Institute’s backgrounder on the proposed EU fuel-quality directive is available online at http://www.pembina.org/pub/2315.
