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Europe Softens Stance On Canada’s Oil Sands As Relations With Russia Sour

Yadullah Hussain, Financial Post

European countries are softening their stance on Canadian oil sands as they look to reduce their dependence on Russia’s oil and gas supplies.

As Europe reels from Moscow’s belligerence and utter dependence on its oil and gas supplies, the Harper government is positioning itself as a reliable partner ready to offer energy security to the continent.

In his first international assignment, Canada’s Natural Resources Minister Greg Rickford was out in full force advertising the country’s formidable crude oil and natural gas resources to energy ministers of Germany, France, Italy, Japan, U.K. and U.S. in Rome on Tuesday.

“In a time where many countries are faced with the dual challenges of increasing demands for energy and an unstable energy supply, Canada is a reliable, secure and responsible source of energy,” Mr. Rickford told reporters after a special meeting with the Group of Seven ministers.

As the only major oil and gas exporter in the group, Canada is leveraging its oil and gas reserves to position itself as a reliable supplier of energy and an alternative source to Vladimir Putin’s Russia.

“Our government is committed to expanding markets for our energy products to Asia and Europe, creating jobs and prosperity for Canadians. Canada will collaborate fully with its G7 and global partners in bolstering energy security and global stability,” Mr. Rickford said.

Ottawa had considered Asia as Canada’s natural market for oil and gas, but the government now thinks Europe’s souring relationship with Russia may give Canadian oil and gas products a foothold on the continent.

Eager to diversify their energy resources, European countries are also warming up to Ottawa and softening their tough stance on the oil sands as they look to reduce their dependence on Russia’s oil and gas supplies.

The European Union has previously deemed the oil sands as one of the dirtiest forms of oil and its proposed Fuel Quality Fuel Directive would effectively make Canadian crude unwelcome in European refineries. But Russia’s latest aggressive moves in Ukraine have compelled the continent to take another look at Alberta crude.

“I feel better about it now than perhaps we have at any point in time,” Mr. Rickford said. “It was a very positive signal from the G7 energy ministers I met with. My discussion with European Union Council Representatives again [gave] a strong signal that this was moving in the right direction for Canada.”

Canada’s plans to build liquefied natural gas projects and crude oil pipelines from west to east was received with “enthusiasm” by his G7 counterparts, he added.

Despite the minister’s strong sales pitch to Europe, almost all of Canada’s proposed liquefied natural gas projects are located on the West Coast facing Asian markets. Only one small LNG project is proposed for the East Coast, but Ottawa is increasingly looking at Europe as an attractive market.

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