Natural Resources Minister Joe Oliver said a move by the European Union to target the oil sands could have an indirect impact on the fate of the Keystone XL pipeline project because it would stigmatize Canadian oil.
Natural Resources Minister Joe Oliver said a move by the European Union
to target the oil sands could have an indirect impact on the fate of the
Keystone XL pipeline project because it would stigmatize Canadian oil.
Canada
has
spent months fighting the EU's proposed fuel quality directive, which is
designed to reduce greenhouse gas emissions. Under the proposal, oil from the
oil sands would be labelled particularly dirty, creating a disincentive for
European refiners to import Canadian crude.
Canada
has
said the methodology used to create the EU's classification system is flawed
and unscientific.
On Tuesday, Mr. Oliver said the EU's directive would damage the reputation of
Canadian oil, something that could weigh on the decision in the
U.S.
on
whether to approve TransCanada Corp.'s (TRP.T) Keystone pipeline project, which
is supposed to bring bitumen from
Alberta
to
refineries along the U.S. Gulf Coast.
"One of our concerns about the fuel quality directive, because it's
discriminatory and targets the oil sands in an unfair and scientifically
inaccurate way, is that it could stigmatize the oil from Canada and impact on
our access to some markets," Mr. Oliver said after delivering a speech to
an energy conference in London. "I don't see a direct tie in with
Keystone, but it clearly would not be helpful."
He and other Canadian ministers, including Prime Minister Stephen Harper, have
been urging the
U.S.
to
approve the pipeline project, which has run into some stiff opposition in that
country. Mr. Oliver said he did not expect a final decision by the Americans
until the middle of 2014 at the earliest.
As for the EU's fuel quality directive, Mr. Oliver said he is hopeful changes
will be made. "I will say that quite a number of countries share our
concerns about the unscientific nature of the directive, its potential negative
impact on the European refinery industry and the fact that it is unlikely to
achieve its environmental objective," he told reporters Tuesday. "I'm
of the view that there is a serious possibility of fundamental change in the
directive."
Mr. Oliver won support for
Canada
's
position from
Britain
.
During the conference, British Minister of State for Energy Michael Fallon said
Britain
agrees with the Canadian position that the EU's fuel directive categories
"should accurately reflect the carbon intensity of particular fuel
sources."
Mr. Oliver also hit back at critics of
Canada
's
track record on environmental protection. On Monday, the Washington-based
Center for Global Development ranked
Canada
last
out of 27 wealthy countries in terms of its commitment to protecting the
environment. Every other country except
Canada
had
shown improvement in that area in the past decade, the organization said.
"Some of this name calling is not accurate or constructive," Mr.
Oliver said when asked about the ranking. "
Canada
is a
responsible developer of its resources. We will never go ahead with a project
unless it's safe for Canadians and safe for the environment."
He also waded into the contentious debate about fracking, which involves
pumping water, sand and chemicals into shale rock underground to unlock natural
gas. The process has divided people in
Britain
and
been banned in some European countries over concerns it can damage underground
water supplies.
Mr. Oliver said
Canada
has
not experienced any problems with fracking. "Fracking has been going on in
Canada
for
over 50 years," he said. "There have been 175,000 wells drilled using
fracking in that period of time. There isn't a single instance of drinkable
water contamination in that entire period."
He said people in
Western Canada
, where most of the fracking
has taken place, "are comfortable with it because they live with it and
they understand that there really isn't that kind of environmental risk." Other
parts of
Eastern Canada
are now reviewing the process, he added noting
that the decision to allow or ban fracking is up to the provinces.
European countries will have to decide for themselves, but there would be consequences
if fracking was not allowed, he said. "One economic consequence is the
lost economic opportunity, the lost jobs and growth."
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