Who're you calling dirty? Canada says would take Europe to WTO over oil sands

A European Union proposal to rank Canadian oil sands as dirtier than conventional fuel could end up at the World Trade Organization (WTO) according to a leaked letter written by Canada's EU Ambassador.

An EU energy panel is proposing a green ranking of fuels based on the entire life cycle of emissions that would rank Alberta's heavy oil as the globe's most polluting – 22% more so than conventional crude because of what's involved in extracting and refining.

It would effectively ban the import of oil sands oil to the EU.

CBC News reports the letter was obtained by the NGO Friends of Europe through Brussels freedom of information laws:

"Canada will explore every avenue at its disposal to defend its interest, including at the World Trade Organization," Plunkett wrote in the letter to Connie Hedegaard, dated Dec. 8, 2011.

The Guardian reports the WTO threat is the latest in a series of "embarrassing revelations":

On 12 February, the occurrence of a secret strategy "retreat" in London in 2011 was discovered. High-level officials discussed the "critical" issue of winning the tar sands argument in the EU, to "mitigate the impact on the Canadian brand" and to protect the "huge investments from the likes of Shell, BP, Total and Statoil". Representatives of Shell, Total and Statoil attended the meeting alongside the UK's state-owned Royal Bank of Scotland and the Canadian Association of Petroleum Producers.

In December, the Guardian revealed the secret high-level help given to the Canada by the UK government, which included David Cameron discussing the issue with his counterpart Stephen Harper during a visit to Canada, and stating privately that the UK wanted "to work with Canada on finding a way forward". Canada's minister for natural resources, Joe Oliver, stated: "[The British] have been very, very helpful."

In October the government of Alberta wrote to EU experts voicing “grave concerns” that the bloc’s plans are unfair and a potential threat to trade ties after EU legal advisers said the plans could probably be defended if Ottawa challenges the move at the WTO.

The Guardian's revelations come as a new study from the University of Victoria in British Columbia puts forth evidence that oil sands have relatively little impact on carbon emissions and that coal by far poses the greatest danger to the environment.

Canada is desperate to ship its oil to new markets – the US currently absorbs 99% of the country's exports of 2 million barrels a day. A glut at the pricing point for US crude means Canada receives a price of as much as $40 below world prices.

Image of Mannekin Pis in Brussels by Xavier Pironet / Shutterstock.com