After several years of debate, the European Union (EU) has rescinded its plan to label Canada’s oil sands as dirty. In what is seen by environmental groups as a backward move, the removal of the “dirty” label also removes the impediment to the oil sands being exported directly to Europe. Environmentalists also believe the decision is in conflict with the EU’s Fuel Quality Directive (FQD).
The Government of Alberta describes oil sands as “a natural mixture of sand, water, clay and a type of heavy oil called ‘bitumen.’” It is estimated 1.9 million barrels of oil is produced from Alberta’s oil sands daily, amounting to 55 percent of Canada’s crude oil production. While this production provided approximately $3.56 billion in royalty payments to the government of Alberta in 2012-2013, opponents to the commodity are concerned about its effects on the global environment and climate change.
According to a CBC news report, the production of oil from oil sands requires more water and energy and results in more greenhouse gases than other oil production. Similarly, a document published by Greenpeace shows that extracting oil from oil sands (also known as tar sands) creates 23 percent more carbon dioxide than conventional crude oil production. Environmental politicians and campaigners are critical of the EU’s decision, saying it is a reversal of climate reforms.
In 2011, the European Commission (EC) announced its goal to reduce the transport sector’s carbon emissions by 70 percent. Accordingly, the EU’s FQD aims to encourage “low-carbon transport fuels” and reduce Europe’s road transport gas emissions by 6 percent. A part of this goal was the European Union’s plan to label Canada’s oil sands “dirty.” However some parties claim the not “dirty” decision is the result of intense lobbying by the Canadian government and oil companies.
In a Financial Post news report, Greenpeace EU’s energy and transport policy director, Franziska Achterberg, said that the EC has put trade deals ahead of the environment. Achterberg said the exclusion of strong measures to reduce “heavily-polluting fuels” will cause the Europeans to fall short of their energy objectives. He also said, “This should be a lesson to (Commission President-elect Jean-Claude) Juncker and his team. Public opposition will only intensify if he allows trade deals to be used to undermine the EU’s environmental legislation.”
In November 2013, Canada’s natural resources minister had warned that labeling oil sands “dirty” would create a stigma that would adversely affect the viability of oil as a Canadian export commodity. In an argument that had delayed the EU’s decision on oil sands for several years, the Canadian government questioned scientific findings about oil sands, and made suggestions of a legal challenge based on unfair discrimination, claiming their product was being singularly targeted.
Some experts have also blamed the strained relations between Russia and Europe for the European Union’s recent decision. In response to ongoing sanctions and political pressures, Russia has now cut gas exports to the European Union by 60 percent. The prediction of resulting shortages has caused the continent to scramble to secure alternative energy sources.
Program manager for campaign group Transport & Environment, Nusa Urbancic, believed the European Union was “letting oil corporations off the hook,” adding that, “Excusing the oil industry from carbon reduction efforts is unfair, inefficient, and costly as well.” Along with the Canadian government, major companies such as BP, Dutch Shell and ExxonMobil have waged what Urbancic considered to be a “five-year siege.”
Despite oil sands’ enormous financial benefits to Canada, environmental campaigners have voiced concerns that the continued exploitation of oil sands will severely impact the EU’s ability to meet its climate change goals. However, even though the European Union has announced Canadian oil sands as not “dirty,” they are continuing to plan increased energy reforms including a proposed 40 percent reduction in greenhouse emissions by 2030.
By Monica Grant
Photo by Luc Forsyth – Flickr License