Campaign 2008 has come to Canada. While we cannot vote in this Presidential election, it looks like we are going to have seats on the 50 yard line and see the action up close.

One of the plays expected from the Obama team is a policy move to bring in a low carbon fuel standard. This policy will effectively see refiners and gasoline marketers who use Canadian oil sands crude penalized because this crude oil emits "bad stuff" into the atmosphere when processed. In a recent article in the Globe and Mail, journalist Shawn McCarthy references a chart that compares the various types of oil. Oil from the North Sea (Brent Crude) emits 494 kg of Carbon Dioxide (CO2) per barrel of Oil processed, Arab Light Crude 517 kgs, Nigerian Crude 541 kgs, Mexican Crude 557 kgs, Canadian Tar Sands Crude 568 kgs and Venezuelan Crude 579 kgs. The important observation here is that Canadian Tar Sands Crude emits only 10% more "stuff" than Arab Light Crude. These data tell me that Tar Sands Crude is hardly worthy of being further maligned by a carbon fuel standard policy.

At this point, team Obama have not clearly spelled out their carbon fuel policy. As I noted in a previous blog, energy prices as measured by West Texas Intermediate Crude (WTI) are pushing up against the $140/barrel mark and placing severe strain on the economy. Meantime, cargo loads of heavier crude remain anchored offshore in the Middle East because the US lacks the refining facilities to process this type of crude.

At some point, team Obama is going to have to step back and take a more intense look at the situation. Do they press ahead with an ill defined policy and harm further oil sands development in Canada? To do so will only see prices for WTI crude press higher towards the ever scary $200/barrel mark. Or, do they quit fishing for the environmental vote and instead offer up tax incentives to help refiners of heavier blends improve their process so as to reduce the amount of emissions. To do this would see increased development in the Canadian tar sands, would take the pressure off WTI crude prices and would help restore consumer confidence. A consumer who can see that team Obama has his best interest at heart will surely throw his weight behind the Democrats in November and send Mr. Obama Washington bound.