TORONTO — Canada has threatened to take Europe to the World Trade Organization if it singles out the oil sands as dirty oil, but officials said Tuesday such action won’t impact free trade negotiations with the European Union.
An EU committee is set to vote Thursday on a proposed fuel-quality directive that labels Canada’s oil sands as more polluting than oil from other parts of the world. If approved it will go to the full European parliament.
A spokesman for Canadian Trade Minister Ed Fast released a letter on Tuesday from Canadian ambassador to the European Union, David Plunkett, who made the WTO threat in December to Connie Hadegaard, the EU’s commissioner for climate action.
“Canada will not accept oil sands crude being singled out in the Fuel Quality Directive as an entirely separate feedstock from other crudes which are bundled together under a single default value,†Plunkett writes.
“I want to again state that Canada will explore every avenue at its disposal to defend its interests, including at the World Trade Organization.â€
Canada has long complained about efforts in Europe to single out oil sands crude in the new Fuel Quality Directive that aims to curb emissions from transport fuels by 10 percent.
But Rudy Husny, the spokesman for the trade minister, said pulling out of ongoing fee trade talks with Europe is not an option.
“Minister Fast has and continues to raise Canada’s concerns with the EU regarding discriminatory fuel quality directive proposals. This matter is not linked to our commitment to productive free trade discussions with the European Union,†Fast said.
Canada doesn’t sell oil to Europe but government and industry officials fear a restriction would set a bad precedent.
The oil sands have dubbed “dirty oil†by environmentalists and the product of oil sands and pipeline delivery to the U.S. is under perennial clouds of environmental objections.
The western Canadian province of Alberta has the world’s third-largest oil reserves after Saudi Arabia and Venezuela: more than 170 billion barrels.
Critics, however, dislike the whole concept of tapping the oil sands, saying it requires huge amounts of energy and water, increases greenhouse gas emissions and threatens rivers and forests. Some projects are massive open-pit mines, and the process of separating oil from sand generates lake-sized pools of toxic sludge.
Travis Davies, a spokesman for the Canadian Association of Petroleum Producers, said the proposed EU directive unfairly singles out Alberta’s oil sands crude but not high-emission oil from places like Venezuela.
Davies said Canada’s oil industry has to continue to improve its environmental record so that it counteracts the dirty oil label.
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