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Canadian Official Warns Europe: Don't Mess With Oilsands

Canada's natural resources minister said his government is committed to seeing the Keystone XL Pipeline become a reality, and rebuked a possible effort by European officials to target the country's oilsands by labeling it as a dirtier form of energy.

Joe Oliver -- who spoke with reporters Tuesday after speaking at the United States Energy Association's Annual Energy Supply Forum in Washington, DC -- also said the government was looking for ways to address greenhouse gas (GHG) concerns raised in a report by the environmental ministry.

The European Commission, a branch of the government of the European Union, has reportedly approved placing a higher carbon emissions value on bitumen-derived fuels -- which would include oil from the oilsands -- than conventional oil.

"We don't want to see the oilsands stigmatized," Oliver said. "These discussions should be based on science and economics. We have no problem with the fuel standards in principle, so long as the oilsands are treated like other types of oil, or even heavy oil for that matter.

"[Fuels] need to be regulated on the basis of the actual emissions, and not put into a separate category for no apparent reason. We don't think that would be fair or appropriate, and we've made that case in Europe."

Oliver lauded the 2011 report by the Commissioner of the Environment and Sustainable Development (CESD), which was tabled in the Canadian Parliament on Tuesday.

"We're pleased to get any input from an independent source," Oliver said. "We are handling this matter very seriously and responsibly. We're actually doing something in contrast to the previous government."

At issue are concerns by the CESD that developing the nation's oilsands would hamper the commitment to reduce GHGs by 17% from 2005 levels by 2020. The government plans to implement a GHG monitoring system in Alberta to help allay those fears.

Although Oliver said Ottawa has spent C$10 billion on clean and alternative energy initiatives over the last several years, he did not say how much a GHG monitoring system in the oilsands region would cost.

"We are proceeding with the development of the oilsands in a responsible way," Oliver said. "Let's not forget that this is an immense national resource for Canada. It will produce some C$2.3 trillion in economic activity over the next 25 years and [more than] half a million jobs."

Oliver added that the Keystone XL project would create 20,000 construction jobs -- plus another 90,000 jobs after the project was completed -- and would create billions in economic activity in the U.S.

When asked if the CESD report had shaken his confidence in plans to develop the oilsands or build Keystone XL, Oliver said, "Not in the least."

"We have had two independent regulatory bodies look at the Keystone pipeline in particular," he added, making reference to Canada's National Energy Board and a final environmental impact statement by the U.S. State Department, the latter of which is still considering the project.

A reporter asked Oliver why he was dismissive of Keystone XL opponents. "I wasn't being dismissive," he said. "We fully respect the rights of Canadians and Americans to make their views known in the public square. This is a constitutional right, it's a part of who we are, and I have no problem with that. But I would like people to look at the facts."

In previous interviews with the media, Oliver blasted Keystone XL protesters and their New Democratic Party (NDP) supporters (see Daily GPI, Sept. 30). Officials with the NDP -- the official opposition party in the House of Commons, the lower house of Parliament -- have criticized hydraulic fracturing as well (see Shale Daily, June 22).

"I'm not a scientist and most people are not," Oliver said. "But scientists have looked at this [Keystone XL] project and have concluded it would not have a negative impact on the environment."

Oliver said he was confident that the Keystone XL project would ultimately be approved by Canadian and American regulators, but said the Northern Gateway Pipeline (NGP) -- which would transport oil from the oilsands to Kitimat, BC, for eventual shipment by tanker to Asia -- could also help Canada realize its strategic goals on energy.

"These two projects are not mutually exclusive, but the [NGP], or something like it, would be consistent with Canadian government policy, which is to diversify our customer base. We export virtually all of our energy to the United States. In my opinion [these pipelines] would serve the national interest of both of our countries."

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