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Whose Palms Are Being Greased?
Arab News: Being at the top is not easy. Somehow Saudi Arabia, the world’s largest crude producer, has been dragged into the debate about Canadian oilsand and if it is clean enough to be used or not.
In an interesting tussle, a virtually unnoticed clause was added almost at the least moment to a US energy bill that bars the government, in particular the Department of Defense, from using Alberta crude because it is deemed unconventional and too dirty.
A provision in the US Carbon Neutral Government Act incorporated into the Energy Independence and Security Act of 2007 act effectively bars the US government from buying fuels that have greater life-cycle emissions than fuels produced from conventional petroleum sources.
The United States has defined Alberta oilsands as unconventional because the bitumen mined from the ground requires upgrading and refining as opposed to the traditional crude pumped from oil wells.
California Democrat Representative Henry Waxman, chairman of the House Committee on Oversight and Government Reform and Republican Tom Davis added the clause...
The US Department of Defense is the largest single purchaser of conventional oil in the world — almost 300,000 barrels a day (excluding overseas imports).
This set in motion the Canadian government. Canada’s Ambassador to Washington, Michael Wilson, urged the White House, State Department and Department of Defense to reconsider the clause, and to reclassify Canadian oilsands crude as conventional. In a letter to the US administration, Wilson warned of “unintended consequences” if the law is applied.
American refineries that import Canadian crude will be caught in the middle: They will have to sacrifice the importation of Alberta crude to adhere to the US legislation.
In the letter, Canada’s ambassador to Washington encouraged US Defense Secretary Robert Gates and other members of President George W. Bush’s Cabinet to exclude oil derived from the tar sands in its application of the new legislation.
“Canada would not want to see an expansive interpretation of (the legislation), which would then include commercially available fuel made in part from oil derived from Canadian oilsands,” wrote Wilson in a letter dated Feb. 22, 2008 that also was sent to Secretary of State Condoleezza Rice and Secretary of Energy Samuel Bodman.
In the letter, obtained by Greenwire — an American online environmental policy magazine — Wilson noted that Canada had surpassed Saudi Arabia as the largest supplier of crude oil to the United States, at 2.3 million barrels per day. He suggested it would be difficult to identify fuel on the US market that was 100 percent extracted by conventional means...