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Canada warns EU to not rank oil sands as dirty energy

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(OTTAWA) - Canadian Natural Resources Minister Joe Oliver on Monday decried a European Union proposal to rank Canadian oil sands as a more polluting fuel than conventional oil.

In a letter to European Union Energy Commissioner Gunther Oettinger, the minister said the proposed the proposed Fuel Quality Directive is not backed by science, would violate the Union's trade obligations, and put at risk the West's energy security.

"Canada will not hesitate to defend its interests," Oliver wrote.

Canada does not export crude oil from its oil sands to Europe, but government and industry officials fear tagging the supply as "dirty" could set a precedent for other markets.

"Any policies that impede the free flow of global oil supplies are detrimental to our collective energy security," Oliver wrote.

"Implementation of the current FQD proposal could have significant and unintended consequences to the world oil supply to the extent it introduces discriminatory and non-science based impediments to global energy markets."

Furthermore, he said there is no credible environmental basis for treating oil sands crude separately from other sources of crude oil.

"Heavy crude is heavy crude," he wrote.

Oil sands are deposits of heavy oil, or bitumen, found in sand and clay.

While conventional crude oil is pumped from the ground, the sticky oil must be extracted from underneath the region's coniferous forest, separated from the sand and water, then upgraded and refined.

Environmentalists say exploiting the unconventional oil sands of Alberta requires energy that produces a large volume of greenhouse gas.

The Canadian minister's rebuke comes only days after Canada and the European Union concluded a ninth round of free trade talks. A trade pact is expected in 2012.

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