U.S. Chamber Applauds Court’s Dismissal of Oil Sands Fuels Lawsuit

Press Release
August 2, 2011
WASHINGTON, D.C.— The U.S. Chamber of Commerce applauds today’s decision by a federal district court to dismiss a lawsuit brought by environmentalists intended to prevent the U.S. Department of Defense from purchasing fuels derived from Canadian oil sands. “The court got it right.  This case simply does not belong in our courts,” said Robin Conrad, executive vice president of the National Chamber Litigation Center, the Chamber’s public policy law firm. “This lawsuit was yet another effort to regulate greenhouse gas emissions through litigation rather than legislation.  This litigation could harm a wide range of American employers, from the domestic refiners who process the oil sands crude to the mechanics who work on the equipment.” In September 2010, the Chamber, along with the American Petroleum Institute and the National Petrochemical and Refiners Association, intervened in the lawsuit in support of the Defense Department. Today, the Eastern District of Virginia dismissed the case because the environmentalist plaintiffs did not have standing to bring the lawsuit. The case is Sierra Club, et al. v. U.S. Defense Energy Support Center, et al. “Today’s ruling was a victory for the many U.S. industries that produce, process, transport or rely on oil derived from Canadian oil sands—making it ultimately a victory for the consumer,” said Karen Harbert, president and CEO of the U.S. Chamber’s Energy Institute.   “At this time of high energy prices and economic hardships, the last thing we should do is restrict the use of a stable, reliable fuel source which would harm our energy security and cost us jobs.” The Eastern District of Virginia agreed with the U.S. Chamber and the Defense Department that the plaintiffs lacked standing to bring the lawsuit. According to the court, the plaintiffs’ alleged injuries from the Defense Department’s fuels contracts were too remote, and that regardless, barring the military from purchasing fuels derived from oil stands would not reduce the climate change-related risks that the plaintiffs alleged.  The plaintiffs had argued that the Defense Department violated Section 526 of the Energy Independence and Security Act of 2007 by purchasing fuels produced from crude derived from Canadian oil sands, which the plaintiffs alleged emit higher levels of greenhouse gas emissions than conventional fuels. The Chamber and the Pentagon argued that Section 526 does not apply to purchases of commercially available oil-sands fuels, which are often blended with various sources by refiners, and also argued that the plaintiffs lacked standing to bring the lawsuit. Access to Canadian oil sands is important to the continued vitality of the American economy.  The U.S. imports close to two million barrels per day of crude oil from Canada, making it our largest supplier.  Nearly half of the Canadian crude oil brought into the U.S. is derived from oil sands.  Already, over 80,000 U.S. jobs are supported by Canadian oil sands development, a figure which could rise to 600,000 by 2035.  Curtailing this valuable source of energy from a longtime ally, like Canada, could divert it to other countries, particularly in Asia, whose demand for affordable energy is rapidly growing. The U.S. Chamber’s Institute for 21st Century launched a new initiative to promote North America energy development last week.  The Partnership to Fuel America promotes the benefits of Canadian oil sands and supports investment in critical North American energy projects. The  mission of the U.S. Chamber’s Institute for 21st Century Energy is to unify policymakers, regulators, business leaders, and the American public behind a common sense energy strategy to help keep America secure, prosperous, and clean. Through policy development, education, and advocacy, the Institute is building support for meaningful action at the local, state, national, and international levels. NCLC is the public policy law firm of the U.S. Chamber of Commerce that advocates fair treatment of business in the courts and before regulatory agencies. The U.S. Chamber of Commerce is the world’s largest business federation representing the interests of more than 3 million businesses of all sizes, sectors, and regions, as well as state and local chambers and industry associations.