NAMI News
The latest trinational news.Tuesday, June 30, 2009
Oil sands to take hit from U.S. bill
Globe and Mail, June 30, 2009 - “Producers and their U.S. refiners face sharply higher costs - Alberta’s oil sands producers and their U.S. refiners face sharply higher costs to reduce greenhouse gas emissions under legislation approved by the U.S. House of Representatives and championed by U.S. President Barack Obama. The American Clean Energy and Security Act, if passed by the U.S. Senate, could also result in new tariffs on Canadian exporters of energy-intensive goods from cement to chemicals if Washington deems Ottawa’s climate-change regulations to be lacking. Under the cap-and-trade plan, U.S. refiners will have to buy permits for each tonne of carbon dioxide that they send into the air. While utilities will be provided free allocation of those permits to reduce the impact on power users, the oil industry will have to purchase virtually all of its permits. Such a system would heavily penalize oil companies that ship oil sands bitumen to the United States because refining the raw bitumen into petroleum products such as gasoline and heating oil is more energy-intensive and higher in emissions than is the processing of conventional oil. U.S. refiners processing the heavier oil sands crude will face higher permit costs, cutting into profit margins for producers and refiners. Both producers and refiners would likely share that cost. A resulting drop in demand would in turn drive down the price of bitumen. Many U.S. refiners have been moving to retool their refineries in recent years to accommodate the heavy crude from Alberta’s oil sands. But the proposed legislation could put all of that at risk.” Read More.
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