Exclusive: Alberta: EU oil sands ranking threatens ties

Fri Oct 21, 2011 3:49pm EDT
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By Charlie Dunmore and Barbara Lewis

BRUSSELS (Reuters) - The government of Alberta, home to the bulk of Canada's oil sands, has written to EU experts voicing "grave concerns" that the bloc's plans to rank unconventional oil as a highly polluting fuel are unfair and a potential threat to trade ties.

With the letter, the provincial government joins Ottawa and the oil industry in a Canadian full-court press to sway the European Union away from labeling one of the country's most lucrative exports as inherently dirty.

"The proposed measure has been deliberately crafted in such a way as to discriminate specifically and uniquely against oil sands derived fuels," said a copy of the letter seen by Reuters.

"Alberta believes that the fuel quality directive implementing measure as it currently stands would be incompatible with the EU's international trade obligations."

Canada exports no oil sands-derived crude to Europe, but government and industry officials worry that tagging the supply as much more carbon-intensive than other crudes could set a costly precedent for current or potential markets.

Canadian Natural Resources Minister Joe Oliver has suggested Ottawa could take the EU to the World Trade Organization if the Europeans adopt the fuel directive.

Oliver has traveled to Europe to press Canada's case and in an interview with Reuters on Friday in London said the EU's plans were discriminatory.

"What they are doing is illogical. In fact it is perverse because they are penalizing oil that they are not importing and they are giving a free pass to oil that they are importing," he said.   Continued...