Can one FTA and 110 lobby meetings make the dirty oil clean in Europe?

Connie Hedegaard, EU Commissioner for Climate Action, looking through a window, during her visit to China last April to monitor developments in EU-China Climate Action. The Commissioner is struggling to see what is out of the window but she cannot escape seeing  herself. Oil sands case requires certainly to look further. (EC Audiovisual Services)

So it happens again. The EU is compromising its own policies to endorse trade and business. What’s wrong with that? Just an equivalent environmental damage of 6 million cars in the European roads by 2020.

It was only yesterday morning that the European Commission issued a controversial proposal that undermines its own 2020 targets to fight global warming causes. According to it different and more dirty fuel types do not need to be labelled as more ‘harmful’ to the environment and hence they are more easy to be imported to the EU.

Oil Sands, the source of ‘evil’

We are talking here of course about the well known “Fuel Quality Directive” that was designed back in 2009 and aimed at a cleaner transport, at least at the time. This would be succeeded by imposing to fuel suppliers to the EU to limit their green house impact radically by 6% until 2020. Thus the EU had first agreed to segregate crude oils depending on how harmful they are to the environment, or else how much Co2 it is needed for them to be produced. A big target for the EU, at least initially, was oil sands or else tar sands, an unconventional petroleum deposit that needs excessive industrial capacity and thus Co2 emissions to be extracted.

Oil Sands means Canada

The part of the world that is the biggest area to extract tar sands is Canada. Particularly the province of Alberta, which is the fourth biggest province of the country. It is evident that if the proposal contained the compulsory different labelling of oil sands, this would also mean their impediment to be imported to the EU. Consequently Canada would lose a lot of money from its exports to the EU.

110 lobby meetings can do the trick

Canada, being the major economy that would be affected by this proposal, has been lobbying intensively in Brussels to keep their “dirty”, as they have been called, oil sands inside the game. It seems that 110 meetings in Brussels by Canadian lobbyists in three years time are enough to make the EU’s environmental policy spin anticlockwise. Of course our good EU Climate Commissioner, Connie Hedegaard, initially a strong fighter against global warming causes in the Old Continent, explained yesterday that “it is no secret that our initial proposal could not go through due to resistance faced in some member states”.

Of course this is the kind of statement to expect here. This “Resistance” sounds like the resistance against the Nazis during the World War II that was limited to a few “member states” as well, which were fighting against the Nazi regime. Only that this time the “Resistance” that Mrs Hedegaard is referring is not motivated and inspired by the principles of liberty and freedom but by major oil industries in the UK and the Netherlands.

Let’s just say here that British Petroleum (BP) and Royal Dutch Shell (Shell) would not say no to Alberta’s crude coming to Europe, which by the way will boost their business. Let’s also underline here that apart from the proposal, as reported by the Wall Street Journal, 700,000 of oil arrived from Canada’s Alberta in Sardinia yesterday. All this crude is of course “dirty” tar sand crude. It is understood that the vessel captain was waiting 2 miles outside of the port not knowing what to do with this amount of oil in his storage. ‘Luckily’ for him Mrs Hedegaard knew.

The EU Trade Fever

Europeans have always been very good at trade. From the era of Marco Polo to the times of Manuel Barroso a lot has changed but not the thirst for trade. In the last years the EU is hunting Free Trade Agreements (FTAs) all over the place. China, Korea, South Africa, Mexico are only a few of our big trade partners. Generally speaking FTAs, if formed and applied properly, are able to speed up growth in the economies, especially in ‘countries’ like the EU, where internal inability to tackle major problems in the economy, like growth and unemployment, becomes more than clear lately.

It is inescapable that one connects this ‘softer’ proposal from Mrs Hedegaard with the Comprehensive Economic & Trade Agreement (CETA) signed between the EU and Canada approximately a week ago. The negotiations for the CETA lasted 5 years, the same time the “Fuel Quality Directive” is being discussed. Coincidence? Given the economic importance of crude trade for the two markets and particularly Europe, it is difficult to believe in coincidence..

Trade Group Transport and Environment estimates that the ‘softening’ of this proposal from the EU side will result in the tar sands fuel comprising the 6,7% of Europe’s transport gas by 2020, compared to the current 0,01%. If one adds here fresh crude sales prices from Alberta and calculate gross margins, she will understand why oil sands are not that ‘dirty’ any more.

Oil sands’ impact on our sleep

At the same time the Commission has the assurance of major Canadian investments in energy pipelines around the country that will make oil trade with the EU easy and fast. This makes many people sleep at night easier, especially when thinking how dependent is Europe on Russia for energy. The tensed relations between the two blocks make it uncertain if we are able to have gas to fill our European tanks in the future. So “let’s go Canada”!

While some people already slept better in Brussels when reading this proposal, others just had a tough night. The proposal came out yesterday but myriads of reactions were noted. It might be that FuelsEurope, the lobby group of European refineries, opened a champagne yesterday for their hard work that bore fruit, welcoming the “simple and effective methodology” that will “limit the impacts on the competitiveness of the European refining industry”. Nevertheless, at the same time environmental groups reaction to this softened proposal was not that victorious.

Greenpeace EU energy and transport policy director, Franziska Achterberg, stated yesterday that “the Barroso Commission has chosen to put trade deals like TTIP (the Transatlantic Trade and Investment Partnership) before the environment,”…”This should be a lesson to (Commission president-elect Jean-Claude) Juncker and his team. Public opposition will only intensify if he allows trade deals to be used to undermine the EU’s environmental legislation.”

Trading the environment

Usually when the Commission makes a pro business decision and environmental organisations scream, the truth and solution lies somewhere in the middle. On the one side, it can be good that we have the FTA with Canada as it will make our GDP bigger and also the chances of making our lives better will increase.

However, Europe is and should be Green and should also keep showing to the rest of the world how to keep Greener. Under no circumstances the European consumer will accept more dirty fuel in his car in order to boost trade between Canada and the EU. This should be acknowledged by Mrs Hedegaard or she is losing her time.

As always, the party to show the golden cut is not the author of this piece, luckily, but instead the European Parliament that is now called to examine this proposal in a “fast track” mode that will ratify it or not.

Let’s hope and pray that the only elected by the people EU body in Brussels will be able to serve again the interests of the citizen and business in the most balanced way.