Conservatives pledge to stop bitumen exports to countries with low emissions standards
CAMPBELL CLARK AND TU THANH HA
Globe and Mail Update
September 26, 2008 at 7:14 PM EDT
CALGARY — Stephen Harper's Conservatives say they will stop future exports of bitumen from Alberta's oil-sands to countries that have lower standards for greenhouse-gas emissions than Canada.
Right now, Canada's bitumen – the thick heavy oil that is transformed into crude oil – is mainly exported to the United States. Mr. Harper's ministers noted that both U.S. presidential candidates have promised tougher greenhouse-gas standards, so it might never apply to exports to that country.
Still, Mr. Harper, speaking in Calgary, the oil patch's business centre, said it might affect exports of bitumen to Asia, where countries like China have not adopted emissions standards for heavy industrial plants.
Alberta Deputy Premier Ron Stevens said his province's petroleum companies are already dealing with a measure of regulatory ambiguities from Mr. Harper's government's own emissions standards, which are set to take effect in 2010.
“This new promise or campaign suggestion will create more uncertainty because, if nothing else it's going to impact the ability to sell this product. And that's never good for business,” Mr. Stevens said in an interview.
The announcement also caught the Canadian pipeline giant Enbridge Inc. off guard.
Enbridge's multi-billion dollar Northern Gateway project would develop a pipeline bringing petroleum from Alberta to Asia-bound tankers at a marine terminal in Kitimat, British Columbia.
“We're surprised by today's announcement. We'll be looking for details,” said Gina Jordan, a spokeswoman for Calgary-based Enbridge.
Countries like China would still be able to buy crude oil that had been transformed within Canada, but Mr. Harper argued that the prohibition would prevent foreign countries from sidestepping Canadian environmental standards by buying the product as bitumen.
“What we will prohibit is bitumen exports designed to circumvent environmental regulations.”
According to the Conservatives, about 500,000 of the 1.3 million barrels a day of bitumen produced in Alberta are shipped out of the country before they are transformed into crude oil.
But transporting bitumen over long distances requires is a difficult process that requires substantial infrastructure, so right now such exports are confined to the U.S.
Mr. Harper's announcement yesterday comes after the U.S. Congress decided last week not to change Section 526 of the U.S. Energy Independence and Security Act, which bans American federal agencies from buying alternative fuels that produce more greenhouse gases than conventional oil.
The Conservative government had proposed so-called intensity targets for greenhouse-gas emissions, which require industry to reduce the amount of greenhouse gases they emit per unit of production. Environmentalists have called for Canada to adopt what they call absolute reductions, so that companies like oil producers would have to decrease their emissions even if they increase production.
When told by a reporter about the Conservative bitumen plan at a Thursday morning scrum in Burnaby, B.C., NDP Leader Jack Layton was slightly taken aback. He said he's going to have to study the proposal, but added that such a plan sounds contradictory coming from Mr. Harper.
“Mr. Harper has been leading the charge to export bitumen out of Canada, without even processing it here, to the United States,” Mr. Layton said. “His cabinet has approved pipelines that essentially are drawing jobs out of Canada, and he doesn't have limits on carbon emissions in Canada, so what you've just suggested to me sounds absurd, or at least contradictory, and one can probably come up with other adjectives after we've studied it more closely.”
Friday, September 26, 2008
Posted by Fillibluster at 9:32 PM