The European Union has changed its mind and is allowing bitumen to be imported to European Union countries. Canada’s Suncor has recently announced that it has sent its first every tanker load of what it calls ‘heavy crude oil’ from Alberta by rail and then by tanker from Sorel-Tracy in Quebec. The shipment is going to an unnamed European country on the Mediterranean Sea.
They are not talking about crude oil. When these oil people talk about ‘heavy’ crude, they are really talking about bitumen from the tar sands. This can come from the Orinoco region of Venezuela or from the Athabasca region of Canada. The European Union used to call it ‘dirty’ oil.
The EU called it dirty because the extraction of bitumen from tar sands requires large quantities of water and energy. To then convert bitumen to synthetic crude oil requires even more quantities of energy and causes considerable greenhouse gas emissions. To add further insult to the environment, the refining process creates large quantities of slag called petroleum coke that is mainly carbon with high levels of sulphur and heavy metals. The reputation for being dirty is not a casual description.
But the situation in Ukraine has changed the EU thinking on bitumen. Where previously Russia supplied energy to Europe, the conflict in Ukraine sits across the pipelines. Some of the tit-for-tat retaliations in this situation have left Europe concerned about energy needs. The most obvious source is the West. North and South America have a cheap and dirty substitute to sell. And bitumen is cheap—if you do not care about the pollution.
In the meantime, Russia is making friends with neighbours such as China and India. They are very large and ready markets for Russian energy products and the pipelines are already in the works.
An open EU market for bitumen will use all the capacity of the reversal of Enbridge’s Line 9 through Toronto and TransCanada’s Energy East proposal. The expansion and higher capacity of these lines never were for Canadian refineries, they were needed to ship bitumen to world markets. If the Keystone XL pipeline south to the Texas ports is rejected by the Obama administration, you can expect more pipelines to be required to Canada’s East coast.
The Harper Conservatives wanted the proposed EU trade deal to buy more European cheeses. They also have a lot of Alberta bitumen to sell to the Europeans. And if we keep pumping carbon into the atmosphere, we will also be able to sell tourists on sailing adventures on an ice-free Arctic Ocean—year round.
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Copyright 2014 © Peter Lowry
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