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Regulating raw bitumen exports: an extremist notion or Conservative election promise?

October 9, 2012

The Conservative Party election promise, in 2008, to bring in a Cap and Trade system to tackle climate change has recently been in the news.  But we’ve not heard any mention about another important energy-related campaign promise from the same 2008 Conservative Party platform (at p.23):

Prohibiting the Export of Raw Bitumen to Higher Polluting Jurisdictions

A re-elected Conservative Government led by Stephen Harper will prevent any company from exporting raw bitumen (unprocessed oil from the oil sands) outside of Canada for upgrading in order to take advantage of lower pollution or greenhouse gas emissions standards elsewhere.

Wow!  In all the excitement of Government Ministers branding opponents of the Enbridge Pipeline and Tankers Project as radicals, Canadians had forgotten all about an election promise which, if implemented, would sink that proposal faster than you can say “oil slick.”

The plan for both the Enbridge pipeline and tankers project and the slightly less well known Kinder Morgan pipeline and tankers expansion is to pipe raw bitumen to Canada’s West Coast, dump it unprocessed into tankers, and send it off for processing somewhere else – in many cases in jurisdictions with lower environmental standards. 

Meanwhile, Canadian oil refineries are already reporting that they can’t get enough oil, apparently because the oil is being shipped for processing abroad.

Let’s think about the implications of the 2008 promise for a moment. 

To be sure, it wouldn’t stop oil and gas companies from shipping raw bitumen to the U.S. or to other countries with equivalent environmental laws.  But it would prevent China and other countries with less stringent regulations from using those weak laws to get a commercial advantage over Canadian refineries.  And as such, it could call into question many of the economic assumptions used to justify building pipelines to export raw bitumen. 

It’s not an energy strategy that would see the tar sands help fund Canada’s transition to a clean energy future, such as we’ve been suggesting.  And it’s certainly not a ban on oil tanker traffic, such as we, and a majority of British Columbians have supported.  But the promise to ban exports of raw bitumen to countries with lower environmental standards would at least signal that Canada is not intending to liquidate its oil and gas assets like there’s no tomorrow. 

By Andrew Gage, Staff Lawyer

Note: We are not aware of any publicly available position from the opposition parties on general restrictions on the export of raw bitumen.  However, all opposition parties have supported the banning of long-range oil tanker traffic on the West Coast in the past.