Canada on Secret Oil Offensive: Documents

Foreign ministry’s tar sands team rebranding Alberta oil in Europe

By  Martin Lukacs 
The Dominion
May 25, 2011
Clayton Thomas-Mueller from the Indigenous Environmental Network during a protest against the Alberta tar sands in London, England, in 2009 – part of the “resurgence of highly critical public campaigns” that the foreign ministry’s secret team is monitoring. Photo: Mike Russell

MONTREAL—The Canadian government has been carrying out a secret plan in Europe to boost investment and keep world markets open for the Alberta tar sands, collaborating with major oil companies and aggressively undermining European environmental measures, documents obtained by The Dominion reveal.

In 2009 the federal government launched a strategy to “protect and advance Canadian interests related to the oil sands,” fearing that growing protest could curb European investment in the industry and that EU restrictions on tar sands imports could be mimicked globally.

“Oil sands are posing a growing reputational problem [in Europe], with the oil sands defining the Canadian brand,” states one document released under the Access to Information Act. “Canada’s reputation as a clean, reliable source of energy may be put at risk.”

Led by the Department of Foreign Affairs (DFAIT), alongside Natural Resources and Environment Canada, the Albertan government, and involving eight foreign missions, a European “Oil Sands Team” has gone on the offensive against threats to the tar sands: they have monitored green groups, responded to “significant negative media coverage,” helped Canadian policymakers lobby European parliamentarians and organize trips to Alberta, worked to “enhance cooperation” with oil companies, and coordinated regular meetings between top European oil executives and Albertan and federal ministers, including Prime Minister Stephen Harper.

The “pan-European oil sands advocacy strategy” was launched in December 2009 around the time of the United Nations climate negotiations in Copenhagen. Hundreds of civil society groups there gave Canada a “Fossil of the Year” award for being “the absolute worst country at the talks,” fingering a powerful tar sands industry as the driving force behind Canada’s hardline stance against ambitious greenhouse gas reduction targets.

The extraction of Alberta’s vast deposits of bitumen, which hold the second largest supply of oil after Saudi Arabia, has been widely criticized as the world’s most environmentally destructive and carbon-intensive industrial project.

One of the main targets of the strategy has been a EU energy law—the Fuel Quality Directive—that would slap a dirty label on tar sands oil as a way of promoting cleaner transportation fuel in Europe.

Europe does not import tar sands oil from Canada, but Canadian policymakers are worried a measure categorizing tar sands oil as an undesirable fuel could spread to other continents. With the Albertan fossil fuel industry—and supportive provincial and federal governments—increasingly looking to Asian markets to sell their crude such precedents would spell trouble.

The obtained documents further reveal that the diplomatic campaign by the Canadian government to “prevent discriminatory treatment of the oil sands under the EU Fuel Quality Directive” was much more co-ordinated than previously understood.

The mission in Brussels took the lead: lobbying the European Commission, engaging in “regular information sharing with industry,” organizing “high-profile events,” and Ministerial visits. The mission provided “reporting with intelligence, analysis and advice” to the Canadian and Alberta governments while the larger Oil Sands Team played a “very useful coordination mechanism” in the campaign.

They appear to have been so aggressive that a European parliamentarian told the Globe and Mail in March that Canada’s lobbying had been “unacceptable.”

The Canadian government was also concerned that a dirty label on the tar sands could galvanize pressure to curb investment by European companies who have been subject to increasingly noisy environmental campaigns calling for divestment.

With the end of cheap, easily accessible oil, European oil giants have scampered to extend their lifespans by turning to unconventional gases and investing billions in the Alberta industry.

A mid-year report of the Oil Sands Team, covering activities between January and July 2010, paints a picture of a Canadian government eager to work closely with these companies to ensure the money keeps flowing.
One section reads less like international lobbying records than a joint playbook. In Oslo, Canada’s mission “holds regular meetings” with largely state-owned Norwegian oil giant Statoil to “update on each others activities and co-ordinate where appropriate.” Statoil has invested more than $2 billion in tar sands operations.

A Wikileaks cable has revealed that in November 2009, a month before the European strategy was launched, then-Environment Minister Jim Prentice described his shock to U.S. Ambassador Jacobsen on witnessing Norwegian public sentiment against investment in Alberta’s “dirty oil,” during a visit to the country. The experience had “heightened his awareness of the negative consequences to Canada’s historically ‘green’ standing on the world stage,” and he believed the Canadian government’s reaction to the dirty oil label was “too slow” and “failed to grasp the magnitude of the situation.”

Each barrel of bitumen Statoil produced in the Alberta tar sands in 2010 released 85 times more carbon than a barrel of conventional North Sea oil, according to company figures.

At Statoil’s annual general assembly last week, shareholders representing nearly 20 per cent of private capital voted in support of a resolution calling for the company to withdraw from tar sands operations.

This was the third year in a row that motions campaigned for by Greenpeace and the Indigenous Environmental Network have dominated the meetings. In November 2010, Statoil buckled to campaigners’ pressure and sold 40 per cent of its Alberta tar sands portfolio.

When Prime Minister Harper flew to France for a few hours on June 4, 2010, to meet with President Nicolas Sarkozy in the run-up to the G8 and G20 meetings in Canada, he found time for an unpublicized meeting with Christophe de Margerie, the CEO of France’s oil major Total. Top Total executives have also met with Canada’s Deputy Minister of Trade and regularly meet with Canada’s ambassador.

The released documents do not reveal anything about the nature of the PM’s discussions. The company, however, recently announced they plan to spend $20-billion in the oil sands by 2020 in hopes of boosting their production to 200,000 barrels day.

In recognition of the tar sands’ new importance to their portfolio, Margerie and the company’s international advisory board spent last week in Alberta. During a speech to the Calgary Chamber of Commerce, he acknowledged that environmental criticism has impacted the company’s reputation. “In terms of image, it’s not good,” he said.

Shell, the biggest energy company in the world, holds the most land leases in the tar sands and plans to triple production to more than 750,000 barrels a day. They have been named in five lawsuits related to environmental damages and violations of Indigenous rights, and have faced shareholder resolutions demanding disclosure of the social and environmental risks of their projects.

The Hague mission is “enhancing its engagement with the sector, and with Shell recently.” The London mission is “in regular contact with the private sector including meetings with Shell, BP, and Royal Bank of Scotland [RBS] as well as Canadian oil companies,” and participated in Shell’s Stakeholder dialogue where they were able to “gather intelligence.” Brussels has “worked with Shell by hosting complementary events” including a multi-stakeholder workshop and dinner.

The released documents indicate that government officials believe their efforts have failed to fully “defend Canada’s image as a responsible energy producer and steward of the environment including climate change issues.” They cite tight budgets and a lack of resources. The oil sands team, according to DFAIT, is composed only of 11 officials, working part-time, spread across Ottawa and the European missions.

The report states that they will need an injection of “significant resources” and also suggests that “a professional PR firm may be able to assist us in moving forward strategically with the use of approved but sharpened messaging.” With a “recent increase in the NGO campaigns targeting public [sic], we anticipate increased risk to Canadian interests much beyond the oil sands (e.g. recent campaign targeting tourists to Alberta).”

Rethink Alberta, co-ordinated by an international network of green groups, has run a billboard campaign in Europe and is mailing postcards to travel agents and tourism operators to discourage tourists from visiting Alberta.

European countries have seen a “resurgence of highly critical public campaigns,” including protests that “have become a regular occurrence in London mostly towards BP, Shell and RBS but also towards the High Commission.”

The report also points to “growing media attention to environmental aspects of oil sands developments in Europe,” resulting in “enhanced media monitoring” by most Canadian missions. Media coverage in Paris was especially bad in their eyes: “the negative articles are essentially about pollution, the wildlife, and the health of native peoples and the destruction of the boreal forest.”

Their campaign against the EU’s Fuel Quality Directive law also appears to be failing. The law aims to force fuel suppliers to cut carbon emissions by six percent by 2020. In initial evaluations EU officials assigned tar sands production a high carbon footprint, meaning suppliers would shun tar sands oil in favour of lower-emission fuels from conventional sources of petroleum.

Canadian policymakers jumped into action against the initiative because they worried other countries like the United States and China—who has previously mimicked European emissions standards on air pollution in the 1990s—might adopt the model.

“Our fear is that if something happens in the EU and it is spread in other countries—not only members of the EU—we could have roughly one-third of the world’s population subscribing to regulation or legislation that mitigates against our oilsands,” Alberta International and Intergovernmental Relations Minister Iris Evans told media in the fall of 2010.

Canadian and industry officials have vigorously contested that the carbon footprint of tar sands is higher than traditional sources, but European policymakers gained new ammo when an EU study released this February concluded that production creates 23 per cent more emissions.

After aggressive lobbying from Canadian officials resulted in the removal of the dirty fuel label on tar sands crude in the fall of 2010, a re-emboldened European commission announced this spring that they would move ahead with the plan to discourage tar sands fuel imports.

Ensuring open markets, however, is also the objective of the ongoing free-trade negotiations between Canada and the European Union, which would involve eliminating environmental “barriers” to trade like the Fuel Quality Directive. Negotiators have frequently raised the issue of the Fuel Quality Directive and recent media reports indicate they even threatened to scrap the agreement if the issue was not resolved to their satisfaction.
DFAIT officials told the Dominion that the advocacy plan is an “official level” strategy at the departmental rather than ministerial level, meaning Cabinet would not have any oversight.

The seeds for it may have been planted in a Department of Foreign Affairs and International Trade’s (DFAIT) planning document from March 2008. DFAIT’s Report on Plans and Priorities for 2008-2009 states that one of its priorities is to “enhance international commercial opportunities for Canadian companies.” It suggests developing an “energy advocacy strategy to brand Canada as a leader in best practices for the development of oil sands reserves, energy research and development, advanced energy technologies, energy-efficient technologies, renewable energy and alternative energies.”

Martin Lukacs is an independent journalist and a member of the Dominion editorial collective.

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