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Canada says California’s new fuel standard may be a “trade barrier”

The Globe and Mail reports this morning that federal Natural Resources Minister Lisa Raitt has written Governor Arnold Schwarzenegger about California’s proposed new low carbon fuel standard saying, “We are concerned that crude oil derived from Canada’s oil sands may be discriminated against as a high (carbon-intensity) crude oil, while other crude oils with similar upstream emissions are not singled out This could be perceived as creating an unfair trade barrier between our two countries.”

“California’s Air Resources Board is expected today to approve North America’s first low-carbon fuel standard…The California board’s regulations would require Canadian oil sands producers to dramatically reduce their emissions before their product could be sold in the state, or to purchase expensive credits from alternative energy producers…”

“While California does not currently consume oil from the oil sands, the largest state in the union is a potentially lucrative market for American refiners that do handle Alberta-based bitumen and upgraded synthetic crude.”

“The Alberta Energy Department, which has sent an official to intervene in today’s (Air Resources Board)hearing, wants to ensure the regulations aren’t designed in a way that favours imported oil from Mexico and Venezuela, which can cause as much greenhouse gas emissions as Alberta crude.”

The full report is at http://www.theglobeandmail.com/servlet/story/LAC.20090423.RCARBON23ART1940/TPStory/Business

Additionally, the Canwest News Service reports that, “U.S. President Barack Obama made a sweeping appeal Wednesday for America to break its dependence on foreign oil and renewed his push for Congress to pass this year global warming legislation imposing a hard cap on U.S. carbon emissions.”

The article also notes, “The House energy and commerce committee opened hearings Wednesday on draft climate legislation – broadly supported by Obama – that seeks to achieve those goals (cutting U.S. greenhouse gas emissions by more than 80 percent by 2050) by imposing a market-based cap-and-trade system on carbon emissions. The Canadian and Alberta governments are watching closely – and somewhat anxiously – as that congressional debate over energy and climate unfolds. Environment Minister Jim Prentice is expected to visit Washington next week – his second trip to the U.S. capital in two months – to participate in a White House summit on energy and climate.”

This story is at http://www2.canada.com/topics/travel/hotspot/obama+ramps+pressure+legislated+carbon/1523542/story.html?id=1523542