Waxman & Whitehouse Question U.S. Trade Representative’s Position on Tar Sands

Washington, D.C. – As the Obama Administration continues its process of determining whether to approve the development of the Keystone XL pipeline, a group of 21 U.S. Senators and Representatives are raising concerns about reports that U.S. trade negotiators are advocating for weaker international regulations on the tar sands crude oil that the pipeline would transport. In a letter led by Rep. Henry A. Waxman and Sen. Sheldon Whitehouse, the lawmakers ask whether the U.S. Trade Representative (USTR) has been pressing the European Commission to alter its proposed treatment of tar sands oil in the European Union’s (EU) Fuel Quality Directive (FQD).

The EU has proposed a FQD that would discourage the use of high-emission fuels like tar sands oil. According to reports, the Office of the U.S. Trade Representative has lobbied against the directive.

“If these reports are accurate, USTR’s actions could undercut the EU’s commendable goal of reducing greenhouse gas emissions in its transportation sectors,” the lawmakers wrote. “This would be contrary to the principles of the Obama Administration’s Climate Action Plan and would reflect a short-sighted view of the United States’ economic interests. Given the importance of the issues at stake, we believe clarification of USTR’s position is necessary.”

The tar sands oil that would be unleashed by the proposed Keystone XL pipeline from Canada to the southern United States produces 17% more carbon pollution, on a lifecycle basis, compared with the average crude refined in the United States, and up to 22% more carbon pollution when the estimate accounts for the full range of products produced from a barrel of tar sands crude.

Against this backdrop, the lawmakers are calling the U.S. Trade Representative’s reported actions “troubling,” and at odds with the goal outlined in the President’s Climate Action Plan of “galvanizing international action to significantly reduce emissions.”

In addition to Waxman and Whitehouse, the letter was also signed by Senators Barbara Boxer, Ed Markey, Dick Durbin, Jeff Merkley, and Elizabeth Warren; and Representatives John Conyers, Jr., Barbara Lee, Raúl M. Grijalva, Rush Holt, Louise M. Slaughter, Jerrold Nadler, Judy Chu, Peter DeFazio, Anna G. Eshoo, Sam Farr, Peter Welch, Alan Lowenthal, Mark Pocan, and Steve Cohen.

The full text of the letter is below.

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December 20, 2013

Ambassador Michael Froman

Office of the United States Trade Representative

600 17th Street, NW

Washington, DC 20508

Dear Ambassador Froman:

We write to you today to raise our concerns about the Office of the United States Trade Representative’s position on the European Union’s Fuel Quality Directive (FQD). Recent reports suggest that USTR has pressed the European Commission to alter its proposed treatment of tar sands crude oil in the FQD. If these reports are accurate, USTR’s actions could undercut the EU’s commendable goal of reducing greenhouse gas emissions in its transportation sectors. This would be contrary to the principles of the Obama Administration’s Climate Action Plan and would reflect a short-sighted view of the United States’ economic interests. Given the importance of the issues at stake, we believe clarification of USTR’s position is necessary.

Tar sands products have a significantly worse carbon footprint than other petroleum products. The State Department’s Draft Supplemental Environmental Impact Statement for the Keystone XL pipeline northern route acknowledges, for example, that Canadian tar sands bitumen produces 17% more carbon pollution, on a lifecycle basis, compared with the average crude refined in the United States, and 22% more carbon pollution when the estimate accounts for the full range of products produced from a barrel of tar sands crude.[1] Just shifting from the average crude to tar sands crude in the amount that would be carried by the Keystone XL pipeline would raise U.S. carbon pollution by 1215 million metric tons over the next 50 years.[2] According to the Administration’s estimate, the social cost of carbon rises from $37 per MTCO 2 e in 2015 to $71 per MTCO 2 e in 2050.[3] This single source of tar sands products, therefore, could produce more than $70 billion in additional damages associated with climate change over 50 years, the costs of which will be partially borne by U.S. businesses and investments worldwide.

According to the World Trade Organization, the United States raised the FQD at the October 2013 meeting of the Technical Barriers to Trade (TBT) Committee. The U.S., along with Canada, “argued that all globally-traded petroleum products should be treated without discrimination, in line with Article 2.1 of the TBT Agreement, and urged the EU to consider less trade-restrictive approaches to achieve its goals.”[4]

In response to questions regarding the treatment of tar sands oil in the FQD from a House Ways & Means Committee hearing, you expressed concern with the level of transparency and public participation in the FQD’s development. You further stated that you “raised these issues with senior Commission officials on several occasions, including in the context of the Transatlantic Trade and Investment Partnership (T?TIP) [and] continue to press the Commission to take the views of stakeholders, including U.S. refiners, under consideration as they finalize these amendments.”[5]

These reports are troubling. A policy of pressuring the EU to alter its FQD would be inconsistent with the goals of the Administration’s Climate Action Plan. As the Plan outlines, one of its three “key pillars” is “for the United States to couple action at home with leadership internationally. America must help forge a truly global solution to this global challenge by galvanizing international action to significantly reduce emissions (particularly among the major emitting countries), prepare for climate impacts, and drive progress through the international negotiations.”[6] We strongly agree with the carbon reduction goals of the President’s Plan, both at home and abroad.

Given the substantial harm that tar sands crude oil poses to the climate and the United States’ long-term economic well-being, as well as the potential conflict with President Obama’s Climate Action Plan, we request that you provide us a statement of USTR’s position on the EU’s Fuel Quality Directive.

Sincerely,

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