Norway faces EU climate measure penalty

Statoil’s Hege Norheim is not worried the legislation will hit its Canadian oil sands project, but says she fears the effect it will have on Norwegian oil.

“What concerns us is that the directive treats all conventional oil equally, regardless of the fact that there are major differences in greenhouse gas emissions,” she tells Aftenbladet.

The new fuel quality directive’s aim is to reduce the greenhouse gas intensity of energy supplied for road transport (low carbon fuel standard) by six percent by 2020 compared with 2010.

It also establishes sustainability criteria that must be met by biofuels if they are to count towards the greenhouse gas intensity reduction obligation.

Vote on Thursday

The move, to be voted on Thursday, will affect all oil recovered by conventional means by the US, Russia, and Norway, setting minimum environmental standards for many fuel types.

This includes coal converted to liquid, oil from shale rock, and oil sands, thus distinguishing between the so-called dirty oil and the one that is cleaner to produce.

The main problem, according to Norheim, is that all conventional oils start at the point they were at in 2010, and that they are all given the same value.

Oil companies will then be given the opportunity to improve the value of their oil by putting in place measures which will reduce emissions.

- The directive only rewards efforts after 2010, and gives everyone an equal starting point. Since we have already gone through with these cuts, it will be much harder and much more expensive for us to cut emissions further than it will be for everyone else. That means this directive supports imports of oil which has been produced with a much higher level of emissions, says Norheim.

- I don't think was the intention, so I hope the EU will take some time out to consider this, she adds.

Oil sands

Canada, supported by the UK, has lobbied intensively to stop the directive because of high values set on oil sand production.

The directive will not become law until the proposal is accepted by a qualified majority of a committee consisting of EU nation technical personnel, and subsequent three-month examination by the European Parliament before being passed or vetoed.