Canadian Embassy emails reveal Canadian, US lobbying on tar sands-derived oil

Posted on January 6, 2011


Recently released emails written by employees of the Canadian Embassy in Washington DC and other Canadian government workers show that the Embassy directly lobbied the Bush Administration and Congress in an attempt to influence regulations and legislation that could restrict exports of Alberta tar sands-derived bitumen and petroleum. The emails further reveal that the Bush Administration had asked the Canadian Embassy to lobby Congress and to use its influence with key oil companies to convince them to lobby on Canada’s – and the Bush Administration’s – behalf.

In December 2007, then President Bush signed into law the Energy Independence and Security Act of 2007 (EISA). It contained a section that was added by Rep. Henry Waxman (D-CA) that prevented the federal government from contracting to buy alternative fuels with high lifecycle greenhouse gas (GHG) emissions such as coal-derived synthetic fuel, oil shale, and bitumen from tar sands. When the Canadian government realized that Section 526 could apply to bitumen extracted from Alberta tar sands and exported to the United States, energy experts within the Canadian Embassy and the government exchanged a flurry of emails between January and March of 2008. Some of the embassy emails have been obtained in a redacted format by the Pembina Institute via the Canadian equivalent of the Freedom of Information Act.

The embassy emails reveal how seriously Canada took Section 526 and its possible application to Alberta tar sands-derived bitumen. The emails show that diplomats within the Canadian Embassy were involved in a multi-prong effort to influence legislation and regulations through oil industry lobbying and by directly lobbying the Bush Administration and Congress.

On Jan. 22, 2008, Paul J. Connors, then Energy Counsellor at the Canadian Embassy in Washington DC composed an email in which he indicated that the Canadian government had already brought up its concerns regarding Section 526 with the US Department of Energy (DOE) and that the DOE planned to determine the section’s implications “in the coming weeks.” This email was sent not to another government employee, but to Susan E. Carter of ExxonMobil.

In another email sent to government colleagues two days later, Connors said that he had not only contacted ExxonMobil, but also the American Petroleum Institute (API) and other bitumen-importing oil companies. Connors specifically mentioned BP, Chevron, ConocoPhillips, Encana, and Marathon. Connors indicated that the API formed a working group to pressure Congress and an alternative fuel working group on the Section 526/bitumen issue as a result of his communication. He also wrote in the email that the oil companies themselves were not concerned because they didn’t feel that Section 526 had broad enough scope to apply to bitumen.

The emails also revealed that the Canadian Embassy had been asked by the Bush Administration to “help [the Bush Administration] to interpret Section 526 in a narrow manner” by saying the restriction on bitumen might run counter to NAFTA trade requirements. Jason Tolland, then the Canadian Embassy’s Counsellor on Energy and the Environment, wrote on Feb. 8, 2008 that “[t]he US government – read administration – is looking to us to provide support for their work to kill any interpretation of this section that would apply to Canadian oil sands.” In an email on Feb. 14, 2008, Lynda Watson of Canada’s National Contact Point trade committee, wrote

It is true that the Administration relies up on other countries to point out these actual or potential inconsistencies with trade agreements, to open the door for the Administration to press its point (“see, even Canada says this runs contrary to…”).

On Feb. 22 Michael Wilson, Canada’s Ambassador to the US, wrote a letter to Defense Secretary Gates in which Wilson said that “Canada would not want to see an expansive interpretation of Section 526, which would then include commercially-available fuel made in part from oil derived from Canadian oil sands.”

By Feb. 25, Connors wrote that the Bush Administration is “proceeding with a definition of conventional fuel which would include oil sands-derived fuel as conventional fuel, not as an alternative fuel, for purposes of Section 526.” In the same email, Connors also wrote that the Embassy was communicating with the Chair of the US Government Interagency Working Group on Alternative Fuels, then Paul Bollinger of the USAF, and that the Working Group had met the previous week “to consider the US Administration’s response to Section 526.” There is no indication in the emails what that response was.

Ambassador Wilson’s letter to Secretary Gates is only the most public of Canada’s direct lobbying efforts directed at the Bush Administration. The released embassy emails show that there was also a great deal of behind-the-scenes lobbying of Bush Administration officials.

Canada didn’t just lobby the Bush Administration – they directly lobbied Congress too. In Connors’ Jan. 24, 2008 email to Helene Viau and Peter Stokoe, Connors wrote that the Embassy “will call on key Democratic energy staffers, including the author of the provision on the House Oversight and Government Reform Committee (Chair is Rep. Henry Waxman D-CA).” In the Feb. 14 email, Watson pointed out that “the time to influence legislation is during the legislative cycle (now).”

Furthermore, Connors email of Feb. 25 mentioned a “backlash” from pro-biofuel and “security-comes-first” members of Congress who wanted “to see Section 526 neutralized.” In the last released email on March 18, 2008, Connors wrote that “Canada appears to have won this battle” but that “ongoing advocacy in the United States will be critical.” Connors also wrote that he was continuing his advocacy by speaking directly with Democratic staff members of the Senate Energy Committee, the House Government Oversight and Reform Committee, and with Bollinger of the US Interagency Alternative Fuels Committee.

The first of many legislative attempts to explicitly repeal Section 526 was submitted on March 31, 2008. In a May 2, 2008 letter from Waxman to Senators Carl Levin and John McCain, Waxman wrote that

section 526 does not bar federal agencies from purchasing generally available fuels that may contain incidental amounts of fuel from tar sands. The provision would block a federal agency from using government contracts specifically to promote or expand the use of fuel from tar sands.

On June 26, 2008, a section was added to the Saving Energy Through Public Transportation Act of 2008 that would amend Section 526 to match Waxman’s claimed intent in his letter to Levin and McCain. This amendment did not exit the Senate Armed Services committee.

The embassy emails also reveal some inconsistencies between what was being said by Bush Administration officials publicly vs. privately . For example, the emails state that the Bush Administration wanted to narrowly interpret Section 526 and they imply that the decision had been made by March 18, 2008. Yet prepared remarks by Department of Energy Acting Deputy Secretary Jeffrey Kupfer for a speech before the C.D. Howe Institute in Calgary, Alberta, contradict this. Kupfer’s prepared remarks state

I can tell you that the U.S. Government has made no decisions that would affect the use of oil sands feedstocks. Our experts continue to analyze the implementation of this provision.

In addition, an Executive Secretariat Executive Commitments System Congressional Report on the Energy Independence and Security Act of 2007 said that the Energy Efficiency and Renewable Energy office of the DOE “will issue guidance on incorporating consideration of lifecycle GHG emissions in all Federal contracts” by August 1, 2009. A detailed search of the DoE and Energy Efficiency and Renewable Energy office website in Dec. 2010 turned up no published guidance on how to comply with Section 526. If a decision had actually been made in March 2008, it was kept hidden behind closed doors even after President Obama took over.

On Aug. 19, 2009, the Defense Energy Support Center (DESC) released its Interim Implementation Plan Regarding Section 526 of the Energy Independence and Security Act of 2007 where tar sands-derived crude oil was defined as “conventional” petroleum based on the ASTM standard for refined petroleum. The interim plan also pointed out that nearly all of the petroleum in the US was partly derived from Canadian bitumen, a point made in the embassy emails and Ambassador Wilson’s letter to Secretary Gates. In response to the interim plan, the Sierra Club and the Southern Alliance for Clean Energy (SACE) filed a federal lawsuit on June 18, 2010 to overturn the plan based on allegations that the DESC didn’t follow the federal rulemaking, that the DESC should have ruled tar sands-derived petroleum as “nonconventional,” and that the DESC failed to perform an Environmental Assessment and write Environmental Impact Statement. The DESC interim plan was the only published rule on whether or not Section 526 applied to tar sands-derived bitumen since the law was signed by Bush in Dec. 2007.

The Sierra Club/SACE lawsuit may have been rendered moot on Dec. 19, 2010, when President Obama signed into law H.R. 3237, the Charles `Pete’ Conrad Astronomy Awards Act, in which Section 526 is amended. The changes to Section 526 permit federal fuel contracts so long as they a) don’t require alternative fuels, b) aren’t specifically to buy alternative fuels, and c) don’t help pay for refinery upgrades to process alternative fuels. H.R. 3237 passed the House by voice vote and the Senate by Unanimous Consent, both without amendment, resulting in no recorded votes in either Congressional body.

These changes appear to meet the goals of the two different Congressional groups identified in Connors’ March 18, 2008 email, namely to “neutralize” Section 526. As for the status of the federal lawsuit, SACE did not respond to a request for comment.

Put all together, the released embassy emails illustrate how a foreign government lobbies both the US Administration and the Congress for changes – via direct contacts, via staff members, and via proxies in friendly industries. But the emails also reveal how the US government can use third-party actors to influence its own internal politics, both foreign governments (Canada) and private parties (oil companies and a petroleum industry association).

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