The Hill Times
BY Rick Smith
TORONTO—The oil industry and Canadian government officials have been crying foul this month over the European Commission’s decision to label tar sands oil as carbon-heavy. As the EU moves toward a final decision on its proposed new policy to cut the carbon footprint of transportation fuels, it’s clear that this is a high-stakes game for the oil industry. As a result, European capitals are facing a volley of Canadian pressure in defence of the tar sands, threats of trade wars, and pressure from domestic oil companies.
The facts of the debate have, at times, been obscured. Despite what’s being said, this is not about discriminating against Canada, but about discriminating against more polluting fuels like tar sands and oil shale.
The EU has pledged to cut the carbon footprint of its transportation fuels by six per cent by 2020, and has been developing a policy called the Fuel Quality Directive to achieve this. This is a laudable goal given that transportation accounts for roughly 25 per cent of the continent’s greenhouse gas emissions. In other words, the transportation sector is being put on a diet, and its performance will be measured by the mix of heavy and light fuels it consumes. Similar to those food labels we all diligently read to see how much fat is in the bag of chips we’re about to eat, the EU has undertaken a rigorous scientific process to label different types of oil based on their carbon content.
Tar sands oil was found to have 23 per cent more carbon than conventional oil, and therefore has been given a ranking of 107 grams CO2 equivalent per megajoule (CO2eq/MJ) of fuel, as opposed to the 87.5 g CO2eq/MJ for conventional crude oil. This is consistent with the research done for California’s Low Carbon Fuel Standard and other independent scientific reviews. Oil shale has been given an even higher ranking than tar sands.
Contrary to claims that Canada is being unfairly targeted, it’s the type of oil that these numbers apply to, not the country it comes from. Any country wanting to export tar sands or shale oil to Europe would face the same challenge based on the simple fact that they have more carbon than conventional oil at a time when the EU is trying to trim its carbon footprint. And, if a company can demonstrate that it has managed to reduce the carbon footprint of these oil sources, it can be given a lower ranking, thereby creating an incentive to invest in reducing emissions.
Another argument being made is that the ranking ignores other sources of carbon-heavy fuel such as some of that flowing from Nigeria and Russia by allowing them to be lumped into the conventional oil category. However, in many of these cases, the higher carbon content is mostly a result of flaring—a process where natural gas is burned at wells producing oil. The proposed EU fuel policy tackles this issue by creating an incentive for oil producers to reduce flaring, and the plan is to look at these oil sources more closely in the near future.
And, since when was it Canada’s foreign policy approach to point fingers at other countries like Nigeria and Saudi Arabia and say, “Hey, they’re just as bad as us” as a way to avoid taking responsibility for our own actions? The EU has called a spade a spade, and governments and industry are trying to pressure other countries into backing down from a sound policy to deal with climate change rather than actually deal with the problem that tar sands oil is more polluting.
The EU decision should be a wake-up call—it’s time to stop relying on ever-increasing PR efforts because they aren’t quelling the controversy. It’s time to start taking an honest look at what needs to be done to fix the problems within our borders. We don’t need to look far. Several credible, independent reviews have highlighted what’s wrong with the current regulatory system for tar sands. Most recently, the commissioner of environment and sustainable development released his annual report that blasted the lack of any credible plan to reach our goals for reducing carbon pollution and said that decisions related to tar sands development were based on “incomplete, poor on non-existent environmental protection.”
The EU will likely make its final decision on the Fuel Quality Directive over the next couple of months. We hope that European capitals hold firm. It may, finally, send the signal to Canada that is needed to spur investment in clean, low-carbon energy instead of hitching our future to dirty, polluting tar sands oil.