European Commission scraps plan to label tar sands as polluting – it causes at least 20% more CO2 emissions in its production
The European Commission has proposed scrapping a mandatory requirement to label tar sands oil as highly polluting, after years of industry opposition. The new proposal abandons one obstacle to Canada shipping crude from tar sands to Europe, and will draw strong criticism from environmental campaigners and Green politicians. To extract the oil the tar sands have to be blasted with steam, using large amounts of gas and water. In 2011, the EU agreed that tar sands should be given a carbon value 20% higher than for conventional oil. However, member states could not agree, and the Commission has been reconsidering the proposal ever since. The new proposal released only requires refiners to report an average of the feedstock used. They do not have to single out tar sands. It retains, however, a method for calculating the carbon intensity of different fuel types over their lifecycle. Some of this very high carbon oil is now making its way to Europe, and some will be turned into jet fuel. This will further increase the emissions from aviation, if the fuel used has required high carbon emissions in its production.
What is the problem with using oil derived from tar sands?
The report Exposing Valero’s plans to bring tar sands oil to the UK says:
“Buried deep under the Albertan boreal forest is 140,000 square kilometres of bituminous sand, known as the ‘tar sands’ – or ‘oil sands’ by the Canadian government and oil industry. The 169.9 billion barrels of proven reserves in Canada are the third largest deposit of oil in the world after Saudi Arabia and Venezuela. Industry currently extracts 1.5 million barrels of tar sands oil per day (bpd), the majority of which is exported to the US.
“The tar sands are the world’s largest and dirtiest industrial project. Compared to conventional crude oil, oil from tar sands is much more energy-intensive to remove and process, requiring substantially more refining. Like many ‘unconventional’ types of oil, tar sands are extracted in an incredibly environmentally damaging way. The process emits 3.2 to 4.5 times more greenhouse gas than conventional oil extraction, uses vast amounts of fresh water and natural gas, and in many cases leaves behind lakes of toxic pollution. Tar sands developments destroy vast tracts of forest habitat, threatening wildlife with extinction. The resulting pollution has been thought to cause local communities, often First Nations, to suffer rare forms of cancer.”
Commission scraps plan to label tar sands as polluting
The European Commission has proposed scrapping a mandatory requirement to label tar sands oil as highly polluting, after years of industry opposition.
The new proposal abandons one obstacle to Canada shipping crude from tar sands to Europe, and is likely to draw strong criticism from environmental campaigners and Green politicians.
Last June, EurActiv reported about the draft European Commission proposal.
It is suggested in a revised draft law, how refiners should report the carbon intensity of the fuel they supply.
The debate about labelling tar sands, also known as oil sands, dates back to 2009, when EU member states approved legislation with the aim of cutting greenhouse gases from transport fuel sold in Europe by 6% by 2020, but failed to agree how to implement it.
In 2011, the European Union executive agreed that tar sands should be given a carbon value a fifth higher than for conventional oil. However, member states could not agree, and the Commission has been reconsidering the proposal ever since.
Confirming a draft seen by Reuters earlier this year, the proposal released on Tuesday only requires refiners to report an average of the feedstock used. They do not have to single out tar sands.
It retains, however, a method for calculating the carbon intensity of different fuel types over their lifecycle.
“It is no secret that our initial proposal could not go through, due to resistance faced in some member states,” Climate Commissioner Connie Hedegaard said in a statement.
“However, the Commission is today giving this another push, to try and ensure that in the future, there will be a methodology and thus an incentive to choose less polluting fuels over more polluting ones like, for example, oil sands.”
Oil sands crude, exploited by the major oil firms, such as BP Royal Dutch Shell and ExxonMobil, costs more to produce than conventional crude, and uses more energy, water and emits more carbon over its lifecycle.
Found in clay-like sands, it has to be dug up in open-pit mines with massive shovels, or blasted with steam and pumped to the surface, before oil can be extracted.
The revised proposal still has to be debated by member states through a fast-track procedure meant to take less than two months. It also needs a sign off from the European Parliament.
Laura Buffet, clean fuels officer at sustainable transport group Transport & Environment, sent EurActiv a statement saying:
“Company-specific carbon values would provide the incentive for one company to perform better than its competitors, for example by not supplying high-carbon oil like tar sands or oil shale in Europe. If company-specific values are not mandatory, at the very least we must ensure that they are an option to reward oil companies for not bringing in high-carbon oil.”
FQD – Fuel Quality Directive or Frequently and Quietly Delayed?
March 27, 2014 (Transport & Environment)
The Fuel Quality Directive (known in the Brussels bubble by the acronym FQD) is the missing link in the Barroso Commission’s 2020 climate and energy package. This law aims to reduce the carbon intensity of Europe’s transport fuels by 6% by 2020. But its real impact depends on its ‘implementing measures’. These measures rank different types of biofuels and fossil fuels based on their greenhouse gas emissions. They also set up rules requiring oil companies to report the carbon intensity of the fuel they supply. Because of fierce lobbying by oil companies and the Canadian government, the FQD remains unimplemented to this day. This timeline shows the delayed progress of the FQD.
The European Fuel Quality Directive (FQD)
For many news stories about the FQD see Euractiv
FQD – an oily tunnel. But will there be light at the end?
Under the Fuel Quality Directive (FQD), oil companies must reduce the carbon intensity of their transport fuels by 6% by 2020. But heavy lobbying from industry, Canada and the US has led to a weakened Commission proposal. Laura Buffet of Transport & Environment argues that the option for oil companies to report accurate company-specific carbon values for their different oil is crucial for an effective FQD.
Recent protests greeted the first major shipment of high-carbon Canadian tar sands oil to enter Europe, with 600,000 barrels arriving at a Bilbao refinery. On almost exactly the same day, EU media reported that the European Commission is planning to weaken the Fuel Quality Directive (FQD), a law to reduce the greenhouse gas intensity of Europe’s transport fuels by 6% by 2020, in order to appease oil industry, Canadian and US government lobbying. As is often the case, there is some truth to the reports on the FQD – but from the version of the draft proposal that T&E has seen, we can say that there are still some useful elements in this weakened text.
The Commission has given in by making the oil industry as a whole, and not individual companies, accountable for the carbon footprint of the fossil fuels that they sell. While the proposal recognises that higher carbon values should exist for unconventional oil like tar sands and oil shale, in terms of complying with the 6% decarbonisation target, fuel suppliers would only use one EU average carbon value. So there is an industry-wide average value instead of different company-specific carbon values for their various sources of oil.
That is a very strange, unfair and inefficient choice. Imagine the same thing for the car industry; it would mean that if Ford chooses to specialize in SUVs, all the others would have to make up for Ford’s cars’ extra emissions. Note that it is the oil industry itself that has asked for this collective arrangement. Either it thinks the law will not be serious, or it behaves like a cartel. The truth is probably a bit of both. Either way, it takes away the incentive to keep tar sands oil – and other high-carbon oil, for that matter – out of Europe. That is a very serious thing, also because it will drive up the cost of our climate policy.
But the sheer fact that big oil and North America are still lobbying in Brussels suggests that this proposal can still have value when it will finally emerge, hopefully this summer.
The draft may not oblige companies to report their individual performance, but it does allow them to do so with a so-called ‘opt-in’ clause. Logically, this might be attractive for the better-performing companies – those with relatively low-carbon products. Strangely enough, even allowing oil companies to use their own performance seems a bridge too far for some departments in the Commission. And surely, and tellingly, the oil industry lobby wants its members not to have this choice either.
The text takes positive steps by calling for the differentiation of oils via their crude trade names. These trade names give an indication of the origin of the oil and indirectly of the initial fields where the crude has been extracted. Fuel suppliers are therefore expected to set up tracking systems for the origin of the petrol and diesel sold. These steps are the start of a much-needed improvement in transparency in the oil market. As other sectors, like the food and car industries, begin to disclose more information about their products, consumers and investors will push for oil companies to do the same. It is about time.
It’s too early for a final verdict, as we still need to see a final proposal and then the actual EU law. Under heavy pressure, the Commission is backtracking. But the oil industry will have to be, and will be, part of the solution, not just part of the problem. And the FQD will be very far from perfect. But it will be a start.
University of Calgary analysis tar sand oil extraction show it is sometimes not even a net producer of energy
According to a new scientific analysis, many tar sands wells are actually using more energy than they produce. If it requires a barrel of oil – or its equivalent in gas – to retrieve a barrel of oil, then what’s the point? It appears this is only possible at present in Canada as the price of oil is lower than the price of oil, so it is commercially viable to burn the cheaper gas in order to get out the more expensive oil. It may make some (warped) financial sense, but it makes no energy or environmental sense. But if the price of gas rises, in relation to the price of the oil, these tar sand wells will go bust. The economics of oil extraction use the term EROEI (Energy Return on Energy Investment) – ideally with EROEI as high as possible (eg. the light, sweet crude found near the surface in Iraq). Other assessments have found the EROEI for tar sands may be 7:1 for extraction and 3:1 after it has been upgraded and refined into a useful fuel. Squeezing oil out of tar sand is an extremely wasteful process, requiring between 2 – 4 tons of tar sand and 2 – 4 barrels of water to produce one barrel of oil. The richest deposits are being exploited first, but already produce a low return – which will become worse once the “lowest hanging fruit” has been removed.
Nobel laureates demand European Commission action to classify oil from tar sands as very high carbon
Twenty-one Nobel prize winners, many of whom have won Nobel Peace Prizes, have urged the EU to immediately implement the Fuel Quality Directive (FQD) which would label tar sands as higher carbon (“dirtier”) than other fuels. The Nobel laureates say the extraction of unconventional fuels – such as oil sands and oil shale – is having a particularly devastating impact on climate change. The powerful letter has attempted to restart the discussion about how tar sands and oil shale should be treated in the EU, a discussion that has been delayed for too long, following a massive lobbying campaign by Canada, the US and the global oil industry. Conventional oil has been given a value of 87.5g of CO2 equivalent per megajoule. In comparison, tar sands oil has a value of 107g, oil shale 131g and coal-to-liquid 172g. The laureates quote IEA warnings that unconventional fuel sources are especially damaging to the environment and climate, and its calculation that two-thirds of known fossil-fuel reserves must be left in the ground ‘to avoid catastrophic climate change’. The letter says the time for positive action is now. The EU can demonstrate clear and unambiguous leadership on this.
The group “No Tar Sands” says:
Tar sands extraction is one of the biggest threats to our climate. While Canada and the EU go head to head over the Fuel Quality Directive, and Obama battles hundreds of thousands of US pipeline protesters, a little-known company is planning to slip tar sands-derived fuel into Europe, discreetly and quietly.
We need to pipe up about this now, before it’s too late.
The majority of Valero’s operations are focused on the business of taking crude oil from various sources, processing it at its refineries to produce gasoline (petrol), diesel, jet fuel, asphalt, petrochemicals, and other products, then selling them either on the market or directly to the consumer through its 6,800 retail outlets.
Valero – no tar sands in the UK!
UK Tar Sands Network, Corporate Watch and Pembrokeshire Friends of the Earth have just released a new report [ http://www.no-tar-sands.org/wp-content/uploads/2012/10/valero_report_4web.pdf ] outlining Valero’s plans to bring tar sands to the UK.
This page gives a summary of the report.
US-based Valero Energy is the world’s largest independent petroleum refiner (a company which refines crude oil, but doesn’t drill for it).
Valero has an appalling environmental record, having repeatedly violated air and water pollution legislation, funded climate change deniers, and fiercely opposed carbon reduction legislation.
Valero is heavily involved in tar sands.
Valero has committed to taking on at least 100,000 barrels a day (20% of initial capacity) from the proposed Keystone XL tar sands pipeline until 2030. The company has also recently upgraded its Port Arthur refinery in Texas, increasing its ability to process heavy sour crude (such as tar sands oil) to 80% of its 310,000 barrels per day capacity. Port Arthur is located where the proposed Keystone XL pipeline is planned to finish, on the Texas Gulf Coast, perfectly positioned for export to Europe and Latin America.
Valero has recently expanded into the UK.
In August 2011, Valero purchased the Pembroke refinery in Wales, marking its first foray beyond the Americas. The £450 million deal also included ownership interests in four major pipelines and 11 fuel terminals, a 14,000 barrel per day aviation fuels business, and more than 1,000 Texaco-branded service stations in the UK and Ireland.
Valero wants to bring tar sands to the UK.
In an investor presentation in 2011 Valero (… demonstrated….) its plans to export diesel from its Gulf Coast facilities to Europe:
By 2012, Valero’s investor presentation was showing this map. Worried yet?
[The red lines are “Diesel / Jet” ]
It is difficult to ascertain the exact details of Valero’s plans. Pembroke refinery is not itself configured to process heavy oil straight from the tar sands.
Oil coming to Pembroke or elsewhere in the UK would come from refineries in the Gulf Coast and would include a blend of oil from different origins, making the supply chain difficult to trace. But as more tar sands oil finds its way to the Gulf Coast, more and more of this is likely to originate from the tar sands.
But wasn’t the Keystone XL pipeline stopped?
The Keystone XL pipeline has faced severe opposition from environmentalists, farmers, landowners, First Nations and the general public, and is currently locked in legislative battle in Congress. However, the southern section of the route, from Oklahoma to Texas, was given support by the Obama Administration and construction has already started. In the meantime a series of alternative pipelines routes out of Alberta are being explored.
And wasn’t the FQD meant to prevent tar sands coming here?
The EU Fuel Quality Directive (FQD) would discourage the use of high-emission crude oil, like tar sands, in the EU transport sector. Despite strong support for the legislation from the EU Parliament, EU Commission and many member states, the FQD has been subject to aggressive lobbying from the Canadian government and oil companies like Shell and BP, causing severe delays.
Assuming it is eventually successful, the FQD will still not actually ‘ban’ fuel derived from tar sands, but act as an economic disincentive. It will also not prevent tar sands-derived products that are used in sectors other than transport, such as ‘petcoke’, a highcarbon solid fuel used in steel refining, power stations and cement production.
Is there already tar sands oil coming to Europe?
There is a tiny trickle of oil derived from tar sands coming into several locations, such as the Netherlands, Spain and France – but it is almost impossible to accurately trace. And guess who is behind most of this oil – Valero.
Greenpeace and Platform’s report, Tar Sands in Your Tank, provides more information.
The tar sands industry needs to be shut down, not expanded. What can we do?
Challenge Valero to share information. We need to force Valero to fully disclose the origin of the oil it imports to Pembroke and other locations in the UK, as well as its long and medium term plans for how this might change based on pipeline expansion in the US.
The Canadian Government and Big Oil are working together to promote the tar sands industry and weaken climate legislation throughout the world. They are particularly targeting Europe. A primary battleground is the EU Fuel Quality Directive.
The Fuel Quality Directive
The EU is negotiating a Fuel Quality Directive (FQD) with the aim of encouraging the use of low-carbon transport fuels and discouraging the use of high-emission fuel. It aims to reduce Europe’s greenhouse gas emissions from road transport by 6% before 2020.
An independent study concluded that oil from tar sands produces 23% more greenhouse gas emissions than conventional crude. Based on this, the EU wants to label tar sands oil as more polluting than conventional oil, which would have the effect of strongly discouraging tar sands imports into the European market.
As a result, the Canadian government is fighting it tooth and nail, largely due to the precedent this would set for other important markets – such as US states. It could also discourage planned tar sands extraction projects in other parts of the world, such as Madagascar.
The Canadian government began by trying to call the science into disrepute, insisting tar sands oil is no more polluting than conventional oil, and invoking the spectre of a legal challenge for unfair discrimination at the World Trade Organisation.
Once the EU had secured a peer-reviewed study confirming the highly carbon-intensive nature of tar sands extraction, Canada switched tack and began stalling the FQD by claiming tar sands shouldn’t be singled out until every other possible source of transport fuel is measured for carbon-intensity.
This argument was misleading as other fuels are also being included in the FQD. But a lot of countries, including the UK, bought it, as well as erroneous arguments about ‘unfair administrative burdens’ on importing companies.
When it came to a vote in February 2012, enough major countries voted against or abstained to stall the process.
Under pressure from environmental campaigners, the UK switched its vote from ‘no’ to ‘abstain’, which was a small but significant victory against the dirty diplomats.
The EU is now undertaking an impact assessment, which will lead to a new proposal and another vote some time in the first half of 2014.