Q+A: The EU clash with Canada over oil from tar sands

Tue Nov 22, 2011 10:22am EST
 
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By Barbara Lewis and Charlie Dunmore

BRUSSELS (Reuters) - The European Union proposes legislation to label crude oil derived from Canada's vast reserves of tar sands, as well as from other sources of unconventional oil, as highly carbon intensive.

Canada has fought the proposal vigorously, with help from its EU ally, Britain, and through political and industry lobbying.

European Climate Commissioner Connie Hedegaard has said she will stand firm and EU government officials meet for further discussion of their plans in early December.

These are some of the questions surrounding the debate.

WHY DOES CANADA CARE SO MUCH?

Canada has the world's third largest oil reserves behind Venezuela and Saudi Arabia. The bulk of Canada's and Venezuela's oil wealth is unconventional crude, whereas Saudi Arabia's is mostly conventional oil that is very easy to extract.

Ottawa sees acceptance of oil from tar sands as vital to its economic future and has questioned the science behind the EU stance.

Canada's oil output this year is expected to rise to 2.9 million barrels per day (bpd), the country's largest oil industry lobby group said earlier this year.   Continued...