EU Delays Green Barrier to Canada Oil Sands: Draft

(Reuters – Pete Harrison)

Europe has yielded to Canadian pressure by delaying possible green trade barriers to Canada’s highly polluting oil sands, but only for one year, a leaked document shows.

Canada has repeatedly warned that draft EU standards to promote greener fuels will harm the market for its oil sands – tar-like oil that is trapped in sediment and forms the world’s second-largest proven crude reserves after Saudi Arabia.

A recent draft of the European Union’s “fuel quality directive” calculates greenhouse gas emissions from myriad transport fuels, from hydrogen to diesel, but says oil sands will only be evaluated some time before December 31, 2011 – a year later than plans made as recently as June. All other fuels will be dealt with by the end of this year, with the aim of guiding industry on which fuels are best suited to the EU’s goal of cutting carbon emissions to one fifth below 1990 levels over the next decade.

The European Union and Canada are in the middle of free trade talks, and the issue of tar sands has become hot. Read more here.

Oil Above $86, Near 18-Month High, After Rallying 24% Over Past 2 Months

(AP/The Canadian Press)

Oil prices hovered near 18-month highs above US$86 a barrel Tuesday as traders considered whether a recovering U.S. economy warranted further gains. By early afternoon in Europe, benchmark crude for May delivery was up four cents to $86.66 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.75 to settle at $86.62 on Monday, the highest since October 2008.

Oil has jumped 24% since early February. Crude had traded between $69 and $84 for about nine months before breaking out last week amid investor optimism that an improving U.S. economy will eventually boost crude demand. On Monday, reports showed strong improvements in demand at services businesses and in the housing market.

“We have a general sense that the economy is improving, and investors are now able to see a possible outlook for greater driving demand,” Cameron Hanover said in a report. “There may be a lull as we await this week’s supply and demand statistics.” Read more here.

U.S. Senator Says Canada’s Oilsands Won’t be Penalized by Restrictions

(The Canadian Press)

Canada’s oilsands won’t be penalized by American legislation that prohibits the U.S. government from buying alternative fuels with higher greenhouse gas emissions than conventional sources, Senator Jeff Bingaman said Wednesday.

Bingaman, a Democrat who chairs the Senate Energy Committee, said he supports adopting a clarification like one in the House of Representatives that clearly exempts the oilsands.

Under that measure, restrictions wouldn’t apply to general U.S. purchases, only contracts drawn up specifically limiting a certain type of alternative, non-conventional fuel.

Extracting fuel from the oilsands is not a new technology anyway, said Bingaman.

And since Canadian oil is mingled with U.S. products, “it is hard to see how (restrictions) could be enforced against Canadian oilsands in any case,” he told a forum hosted by the Canadian American Business Council.

Canada has been worried that a major U.S. energy bill passed last year would affect future exports of crude from Alberta, which are expected to rise to three million barrels a day by 2015 from 1.3 million now.

The bill, which Bingaman helped write, prohibits the American government from buying alternative fuels that produce more emissions over the life of a project than other sources.

Environmentalists on both sides of the border support restrictions on the oilsands. They want Canada to slow development and take more steps to clean it up.

A coalition of groups, including the national Resources Defence Council, says Canada’s plans to address global warming will allow carbon dioxide emissions to triple by the year 2020.

The U.S. energy bill included restrictions over fear that the government’s purchasing power would be used to promote new technologies with worse emissions than current ones. Read the complete article.