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LONDON — Natural Resources Minister Joe Oliver said a move by the European Union to target the oil sands could have an indirect impact on the fate of the Keystone XL pipeline project because it will stigmatize Canadian oil.
Canada has spent months fighting the European Union’s proposed fuel quality directive which is designed to reduce greenhouse gas emissions. Under the proposal, oil from the oil sands would be labelled particularly dirty, creating a disincentive for European refiners to import Canadian crude. Canada has said the methodology used to create the EU’s classification system is flawed and unscientific.
On Tuesday Mr. Oliver said the EU’s directive would damage the reputation of Canadian oil, something that could weigh on the decision in the United States on whether to approve the Keystone pipeline project, which is supposed to bring bitumen from Alberta to refineries along the U.S. Gulf Coast.
“One of our concerns about the fuel quality directive, because it’s discriminatory and targets the oil sands in an unfair and scientifically inaccurate way, is that it could stigmatize the oil from Canada and impact on our access to some markets,” Mr. Oliver said after delivering a speech to an energy conference in London. “I don’t see a direct tie in with Keystone but it clearly would not be helpful.”
He and other Canadian ministers, including Prime Minister Stephen Harper, have been urging the U.S. to approve the pipeline project which has run into some stiff opposition in the U.S. Mr. Oliver said he did not expect a final decision by the Americans until the middle of 2014 at the earliest.
As for the EU’s fuel quality directive, Mr. Oliver said he is hopeful that changes will be made. “I will say that quite a number of countries share our concerns about the unscientific nature of the directive, it’s potential negative impact on the European refinery industry and the fact that it is unlikely to achieve its environmental objective,” he told reporters Tuesday. “I’m of the view that there is a serious possibility of fundamental change in the directive.”
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