Push to bar oil sands to US military
By Sheila McNulty in Houston
Published: March 18 2008 17:11
The powerful chairman of a key congressional committee is pressing the US federal government to comply with energy legislation that bars the use of fuel from Canada’s oil sands.
The legislation, signed into law Dec 19 last year, prohibits the federal government from procuring fuels with a higher greenhouse gas content than conventional fuels, such as that from Canada’s oil sands or coal-to-liquids.
Henry Waxman, chairman of the House oversight committee, wrote to Robert Gates, US defense secretary, in January requesting he identify all Department of Defense projects that might be impacted by the law and what steps he will take to come into compliance.
The Defense Department is the US government’s biggest single oil consumer. In 2006 its energy supply agency purchased 136m barrels of petroleum, an amount greater than the 360,000 barrels per day consumed by Sweden.
”The federal government is the largest consumer of energy in the United States, so looking at ways to reduce the government’s carbon footprint can have a big impact,” Mr Waxman told the Financial Times. ”When the government spends taxpayer dollars to fuel government operations, it shouldn’t choose fuels that make the problem of global warming worse.”
Canada is the largest supplier of oil to the US, at 2.3m barrels per day. About half of those crude oil exports are derived from oil sands, and the oil sands industry is a major contributor to Canada’s economy.
Mr Waxman included the restriction in the 2007 energy independence and security act when it was being drafted last June, in response to proposals under consideration by the Air Force to develop coal-to-liquids fuels.
The law sits uncomfortably with the policy of the Bush Administration, which has been encouraging development of the oil sands – the biggest proven oil reserve outside Saudi Arabia - to bolster energy security by reducing dependence on the Middle East.
Canadian Ambassador Michael Wilson last month wrote to Mr Gates, Condoleezza Rice, US Secretary of State, and Samuel Bodman, US Energy Secretary, warning that a narrow interpretation of the legislation would have “unintended consequences for both countries”.
A source close to the political wrangling said the government was likely to seek a way away around compliance, such as by claiming carbon from the oil sands projects will be captured and stored once technology is available, or that the provider has offset carbon emissions with carbon credits.
Canada this week revealed new regulations mandating carbon capture and storage for oil sands and coal-fired plants that begin operating from 2012.
Yet the source said it is unclear whether such tactics will work, given the law provides no loopholes and the political climate has turned against greenhouse gases.
In his letter to Mr Gates, a copy of which has been obtained by the Financial Times, Mr Waxman was sceptical of such workarounds. ”The promise that in the future, there might be ways to avoid increases in greenhouse gases would not be sufficient to meet the requirements,” he wrote.
Tom Davis, the highest ranking Republican on the oversight committee, also signed the letter to Mr Gates. “It is important [the Defense Department] come in line with energy policy and the will of Congress not be ignored,” said Mr Davis’ spokesman, Ali Ahmad.
The Department of Defense has missed a Feb 15 deadline set by Mr Waxman for a response to the letter, but has said it is working on its reply.
It referred calls to the Department of Energy, which says it is assessing the implications of the law but offered its supports for oil sands development.
“The US government, including Secretary Bodman, have on many occasions publicly welcomed oil sands expansion, given that this expansion further enhances US and north American energy security,” said Megan Barnett, Energy Department spokeswoman.
Copyright The Financial Times Limited 2008
http://www.ft.com/cms/s/0/24367b9c-ef9c-11dc-8a17-0000779fd2ac.html
