EU yields to Canada over oil trade "barriers": sources

Wed Mar 24, 2010 6:27pm EDT
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By Pete Harrison

BRUSSELS (Reuters) - The European Union has yielded to Canadian demands it remove possible trade barriers to polluting oil sands to avoid further damage to ties, according to sources and leaked documents.

Relations are already strained after the European Union banned imports of seal products last July on animal welfare grounds, a move Canada is challenging at the World Trade Organization.

Canada warns that draft EU standards to promote greener fuels are too unwieldy and 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.

"Such a system would be extremely difficult to implement and monitor, and would in itself create barriers to trade," Canadian Ambassador Ross Hornby told a top official at the European Union's executive in a letter seen by Reuters.

Several sources said Canada had raised the issue frequently during trade talks with the EU.

Environmentalists bitterly oppose the industry, saying the extra energy needed to extract oil from the north Alberta sands intensifies the damage they do to the climate, while extraction wastes harm wildlife and pollute rivers.

"Carbon dioxide emissions from the extraction and refining of oil from tar sands are three times higher than those from conventional sources," said Nusa Urbancic of green transport campaigners T&E.

"Treating tar sands like any other source of oil will just increase Europe's dependence on this dirty fuel for years to come," she added.   Continued...