New Report on CETA and Tar Sands

By Andrea Harden-Donahue
Council of Canadians
October 14, 2011

A new report on tar sands and CETA, written by Scott Sinclair of the Canadian Centre for Policy Alternatives was released today.

The report is timely given the recent news that the EU Fuel Quality Directive is moving forward to EU MEPs for decision before the end of the year.

The last two years have seen fierce lobbying on the part of the Harper government against the EU FQD. According to a report prepared by Friends of the Earth Europe, there have been over 110 lobbying events organized by Canadians on tar sands and the FQD since September 2009!

If you missed it, check out the UK Tar Sands Network’s recent stunt mocking the cozy tar soaked relationship between the UK (receptive to Canada’s lobbying) and Canada exposed at a recent Energy Summit.

What’s at stake?

Our government – acting as de facto oil peddlers – is challenging the FQD because it assigns a higher carbon value (compared to conventional oil sources) to tar sands. And not just Canadian tar sands, all tar sands. As many of us have highlighted for a number of years, the tar sands in Alberta are not unique (although the scale of them is unique). Exploiting these reserves is the cutting edge of a destructive shift to greater reliance on more polluting, unconventional sources of oil (peak oil, anyone?).  While the Canadian tar sands are by far the most advance, there are also tar sands deposits in Venezuela, Russia and the Republic of the Congo, to name a few.

Shortly after the announcement about the FQD, our Minister of Environment, Joe Oliver, asserted that the value assigned to tar sands is not based on science and is discriminatory. We and many others understand that this is clearly not the case. The value assigned by the Commission is based on a peer reviewed scientific report prepared for the Commission. In fact, there are numerous reports on the full lifecycle emissions of Canadian tar sands that confirm they are a high carbon fuel – even higher than the value assigned in the EU FQD.[ii]

Back to the report.

Sinclair adds a needed element to this debate. If Europeans want to protect the FQD from corporate challenge, they are best advised to reject the inclusion of an investor-state dispute settlement in the CETA.
Given the demonstrated hostility of the Canadian government towards the FQD, it would be completely reasonable for the EU to take steps to guarantee that the FQD cannot be challenged under the CETA. A reservation exempting the FQD to the extent that it is consistent with WTO obligations and an article referring any disputes over the FQD to the WTO would be entirely appropriate. Such a reservation could avoid a dispute under the CETA brought by the Canadian government, ensuring that any government-to-government dispute occurs at the WTO. But the safest way to avoid disputes brought by foreign investors to the FQD or other European environmental regulations is to not include investor-state dispute settlement in the CETA.

There is loads of other good content in the report, including an overview of how NAFTA Chapter 11 has been used to undermine important environmental and social policy.

Sinclair also makes the point that effective environmental regulation of the tar sands will come about when, a) Canadian governments have a change of heart b) governments and consumers in importing and non-importing tar sands countries up the pressure. The EU FQD does exactly this, and that’s why our government is concerned – it’s about the precedent that could be set for other jurisdictions, including our major trading partner to the South.

This position isn’t altogether surprising, recognizing:

  • The Harper government and the Canadian Association of Petroleum Producers (CAPP) are on the defence given the rising tide of criticisms, particularly around the Keystone XL fight
  • We’ve already seen the Canadian government criticize similar legislation in California
  • That our government’s foreign policy is more influenced by CAPP and Ezra Levant’s crowd – funny how our government now refers to tar sands as ethical oil – then addressing the serious social and ecological consequences of the tar sands. (here’s a useful list from www.tarsandsaction.ca of what could be done, were there political will

Sinclair’s analysis is consistent with Steven Shrybman’s conclusions in a legal briefing prepared for the Council, Indigenous Environmental Network and Friends of the Earth Europe; The Potential Impacts of the Proposed Canada-European Union Comprehensive Economic and Trade Agreement (CETA) on the Pace and Character of OIl Sands Development.

We’ll be paying attention over the next weeks to any renewed lobbying efforts and the progress of the EU FQD. We are prepared to challenge this lobbying and support the FQD.

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