US Govn’t To Dirty Image Of Canadian Oil Sands

Oil giants are to press with the development of Canada's oil sands, regardless of legislation passed by the US government that could bar procurement of its carbon-intensive fuel.

Royal Dutch Shell's chief executive, Jeroen van der Veer, told the Financial Times last week that oil groups were convinced there would be people prepared to take the fuel if oil sands were developed. Royal Dutch ShellJim Mulva, chief executive of ConocoPhillips, said in a separate interview: "The US needs this energy source."

The Energy Independence and Security Act, signed into law in December, restricts US government procurement of alternative fuels to those whose lifecycle greenhouse gas emissions are equal to or less than those from conventional petroleum sources.
Canada's oil sands - the biggest proven oil reserve outside Saudi Arabia - are considered unconventional fuels, and producing them emits more greenhouse gas than conventional production.

This has led Canada to warn Washington that narrow interpretation of the legislation would have "unintended consequences".
US rejection o f fuel from oil sands could establish an international precedent, jeopardising the billions of dollars the oil majors have invested.

Nonetheless, Henry Waxman, the chairman of the powerful House oversight committee, is pressing the US government to comply with the legislation. In January he wrote to Robert Gates, US defence secretary, whose department is the US government's biggest single oil consumer, requesting that he identify all defence department projects that might be affected by the law.