Senator wants U.S. bill killed that limits oilsands imports
Canadian energy key to security of America
Dan Healing, With a file from Geoffrey Scotton, Calgary Herald
Published: Wednesday, April 09, 2008
A U.S. senator called Tuesday for the repeal as soon as possible of an energy bill provision signed into law by President George W. Bush in December that could prevent government purchases of fuel originating in Alberta's oilsands.
Senator Pete Domenici of New Mexico warned the provision -- which he called "irresponsible and counterproductive" -- could lead to difficulties in importing oil from Canada. More than half of the crude oil produced in Canada comes from the oilsands and that proportion is expected to rise exponentially over the next dozen years.
The energy legislation provision, known as Section 526, bars the U.S. from buying alternative fuels if the production creates more greenhouse gases than conventional fuels.
In the text of his keynote speech to the Energy Information Administration's Annual Conference Tuesday, Domenici stressed the need for the U.S. to reduce the $400 billion it will spend on oil imports this year by increasing domestic output. He added the U.S. must ensure imports from Canada continue.
"Damaging provisions, such as Section 526 of last year's energy bill, must be repealed as soon as possible," he said in Washington.
"At a time when nearly all of us agree that oil from overseas is a detriment to our national security, interpretations of the law that harm our ability to provide our own fuel, or import fuel from our ally and neighbour to the north, are irresponsible and counterproductive."
Domenici is the senior Republican on the Senate Energy and Natural Resources Committee.
Murray Smith, former Alberta minister of energy and provincial representative to Washington, said Domenici is a huge supporter of U.S. oil shale development, which would require recovery technology similar to that in the oilsands.
"He realizes this should be made crystal clear in legislation that Alberta oilsands is in fact a premium crude and one that is much sought after."
He said a repeal may not happen but clear definitions are expected and the legislation may yet be corrected by the president's office.
Greg Stringham, a vice-president for the Canadian Association of Petroleum Producers, said Section 526 may not have applied to Canadian oil anyway.
California Democrat Henry Waxman, who helped write the clause, has said he didn't intend it to apply to fuels that are generally available in the market and contain a percentage of fuel from non-conventional petroleum sources, such as the oilsands.
"The section itself had created a great deal of confusion and what we had asked and the embassy had asked is to clarify the confusion," said Stringham. "So, whether that was done through a definition as to what this was going to apply to, because it was really uncertain, or through a repeal, we are kind of indifferent to that.
"I know the work was going on on the definition side. This is the first I've heard of a potential repeal."
Alberta Energy spokesman Bob McManus agreed.
"I think clarity is what we were looking for, as to exactly what the intent of that section was."
Stringham and McManus added oilsands companies may not be considered "dirty" industries anymore in view of Alberta's new carbon emission reduction regulations.
As of April 1, producers of greenhouse gases, including oilsands firms, are required to either reduce emissions or pay millions to buy carbon offset credits or invest in the government's green technology fund.
But Dan Woynillowicz, senior policy analyst for the Pembina Institute, said the new rules are "insufficient" and Alberta needs to be doing more to regulate new oilsands projects.
He added a repeal of Section 526 wouldn't be a defeat for those urging carbon emission cutbacks.
"I think it would be a step back in terms of the positive signals that have been sent but I think it would be relatively short term because I think it's quite clear the U.S. is going to moving forward with more action on climate change in the near future."
Last week in Calgary, U.S. Ambassador to Canada David Wilkins told the Herald Canadians shouldn't be overly concerned about Section 526.
"It really was designed to address something I think that the navy was involved in, regarding coal. . . . I do know that this administration supports Canadian oil productivity, is certainly supportive of development in the oilsands and I do not see that as becoming a problem."
dhealing@theherald.canwest.com
© The Calgary Herald 2008
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