The Canadian government fears an EU plan to limit fuel emissions will prompt an end to the lucrative oil sands
The Newfoundlanders’ Club is a bar with tartans, lobster traps and live Irish music. It's also the most popular pub in Fort McMurray, a northern Alberta town of 50,000 people.
With hanging photographs of rocky shorelines and small port towns, the pub serves Newfie dishes and beers with a side of nostalgia.
“It's a home away from home,” said cook Shirley Grandy, who moved to Alberta from Marystown, Nfld. seven years ago. “I first came to visit my son when he bought me a ticket. I found work and never went back.”
Fort McMurray is a boomtown at the centre of the oil sands, a collection of semi-solid deposits in northern Alberta comprising the world's second-largest crude oil reserves. Commercial production began in 1967, but thrived as oil prices spiked in the late '70s and early 2000s.
Because the oil is trapped in sand, processing it is much more energy-intensive than other sources. Layers of trees and soil are removed before sand is either scooped up or pumped out with steam. This natural bitumen is then heated with natural gas and extremely hot water to separate oil for processing. The remaining sand, water and oil residue is kept in on-site tailings ponds.
Environment Canada deemed the oil sands the country's fastest-growing source of greenhouse gases in 2010. But the project is staggeringly lucrative, with the provincial and federal governments predicting a $490-billion gain in royalties over the next 25 years. In that same period, an average 450,000 jobs will be added annually, according to an industry-sponsored survey.
This exponential growth is seen in towns like Fort McMurray, where immigration exceeds housing. The town census says population grew 80 per cent from 2000 to 2010.
Statistics Canada began tracking a steady rise in movement from Newfoundland to Alberta in the 1970s. Annual numbers have fluctuated, but estimates place up to 10,000 Newfoundlanders who have moved to northern Alberta in the past decade.
With high-paying jobs and rich scenery, Alberta brings in many from the aging island with dying towns and limited job prospects.
“I would be a millionaire if I were back in Newfoundland,” said Grandy, adding that it's common to hear Newfie accents around town.
But the Canadian government fears EU legislation targeting high-carbon fuels could end the project and its nationwide economic growth.
The EU fuel quality directive was introduced in 2008, legally binding EU oil suppliers to reduce carbon emissions from road transport fuels by 6 per cent of 2010 levels by 2020. The directive is part of a wider effort to eliminate a fifth of EU carbon emissions by the same year.
To enforce the directive, the European Commission has to define the carbon value of various fuels. The commission’s environment committee ordered a study by Stanford University of the oil sands' overall carbon emissions, including extraction and processing.
Published in January 2011, the study found oil sands to have 23 per cent more carbon emissions than conventional sources. In October, the environment committee voted to ascribe this higher emission value to oil sands fuel, deterring suppliers aiming to meet their 6 per cent carbon reduction.
“The directive aims for a discrete measure to differentiate between low- and high-carbon oil,” said Suzanne Dhaliwal, co-founder of the UK Tar Sands Network. The group works with environmental and Aboriginal groups to protest oil sands development.
“It's essential,” said Dhaliwal. “We're heading towards catastrophic climate chaos.”
The Canadian government fears the EU directive will set off a global chain reaction of negatively labelling the oil sands and has defended them since the directive's launch.
In October 2009, cabinet ministers publicly contemplated initiating a World Trade Organization challenge. The directive later became a major sore point in ongoing negotiations for the Canada-European Comprehensive Economic and Trade Agreement.
In December 2009, the federal government launched a “pan-European oil sands advocacy strategy” to “protect and advance Canadian interests.”
A series of freedom-of-information requests by media and advocacy groups revealed a team including employees of the Department of Foreign Affairs and International Trade. The group monitored activists, responded to negative media coverage and helped oil companies lobby European parliamentarians.
“While Europe is not an important market for oilsands-derived products, Europe legislation/regulation, such as the EU Fuel Quality Directive, has the potential to impact the industry globally,” read an April 2011 email released this week.
The lobbying was discussed at the European Parliament in March 2011, with Finland's former environment minister decrying coercive meetings with key politicians.
“The government of Canada has been lobbying us in a manner that is not acceptable,” said Satu Hassi of the Green Party.
Lobbyists and industry officials now argue the directive singles out oil sands while turning a blind eye to other heavy crude sources like converted shale and coal. But these sources do not apply to the transport-focused directive.
“Canadian producers are supportive of people working to reduce their emissions,” said Canadian Association of Petroleum Producers spokesperson Travis Davies. “But the directive discriminates against a Canadian product.”
Davies noted that certain oil-producing countries like Nigeria are not being targeted by the EU despite using carbon-intensive processes that are illegal in Canada.
“From a policy viewpoint, discriminating against a country like Canada, one that openly publishes its figures, acts as a disincentive to others to publish their information,” he said.
The European Commission's environmental committee will discuss the directive in late February and likely send it to a parliamentary vote.
Canada, which withdrew from the Kyoto Protocol in December, continues to oppose the directive, especially after plans for an American bitumen pipeline were delayed indefinitely.
Two weeks ago, Natural Resources Minister Joe Oliver denounced “radical” and “foreign-funded” environmentalists for opposing oil-sand expansions.
Speaking from her UK office, Dhaliwal described Oliver's comments as “hypocritical.”
“The jobs pay well [...] but aren't stable. Canada should invest in green jobs. The most difficult project of this generation will be weaning ourselves off of oil dependence.”
This was my entry for the 2012 EU-Canada Young Journalist Award, which requires a 1,000-word submission "focusing on a current issue facing the European Union or EU-Canada relations." I didn't win, but I'm glad I entered.
