Interesting news for investors and environmentalists: The European Union says crude oil extracted from Alberta’s tar sands should be ranked as a dirtier fuel source than oil tapped from conventional oil wells, a move that could effectively ban the import of the controversial oil.
The European Commission endorsed a measure that would essentially rate fossil fuels based on the CO2 emitted during extraction, refining, and combustion. The EU has proposed that tar sands oil be ascribed a greenhouse gas value of 107 grams per megajoule of fuel, compared with 87.5 grams for ordinary crude oil.
“With today’s proposal we send clear signal: as fossil fuels will be a reality in foreseeable future it's important to give them a right value,” said EU Climate Change commissioner Connie Hedegaard.
Sustainable investors such as Boardwalk Capital have viewed the biggest tar sands companies as a riskier investment proposition in a carbon-constrained future. It is distinctly possible that their reserves need to be substantially discounted, reducing asset values and share prices -- a risk that investors need not bear.
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