CALGARY -- American legislation to bar so-called "dirty" fuels doesn't apply to Canadian oilsands, a leading U.S. senator said Wednesday.

Speaking to a forum of Canadian and American business people in Washington, Senator Jeff Bingaman of New Mexico, chairman the senate energy committee, said oil from Alberta's oilsands doesn't qualify as dirty oil under U.S. law.

The provision, Section 526, bars the U.S. government from buying alternative fuels that create high levels of greenhouse gas.

Bingaman said it doesn't.

"Since Canadian feedstocks are commingled with U.S. feedstocks at oil refineries, it's hard to see how Section 526 could be enforced against Canadian oilsands in any case," he told the Canadian American Business Council. "I do not believe that Section 526 will be a barrier to oil imports from Canada."

Environmental groups on both sides of the border have been lobbying to have oilsands declared "dirty oil."

Various delegations to Washington, including one led by Premier Ed Stelmach, have faced protests from environmentalists who see oil produced from bitumen as a major source of greenhouse gases linked to global warming.

On Wednesday, the Wall Street Journal reported that a coalition of environmental groups led by the Sierra Club succeeded in having air permits for the Wood River, Ill, refinery expansion halted.

The facility, the 10th-largest refinery in the U.S., would process more than 350,000 barrels per day of heavy oil from the ConocoPhilllips-EnCana oilsands venture.

The project was expected to be complete by the first quarter of 2011, but Conoco spokesman Bill Graham said it's unclear if it will be delayed.

The expansion will actually allow the refinery to produce cleaner fuels such as low-sulphur diesel and reformulated gasoline, Graham said. He suggested the public at large is starting to blame the environmental lobby and government red tape for high fuel prices.

Most Americans are happy to have reliable oil supplies from Canada, he said.

"The environmental groups are certainly more aggressive, but what's interesting is the opinion of the public as a whole."

A Fleishman-Hillard opinion poll for the Canadian American Business Council suggests that Canadians are more concerned about the environmental impacts of oilsands development while Americans care more about reducing their dependence on oil from the Middle East.

About 43 per cent of Canadians said they are prepared to stop oilsands production even if it meant paying more for gasoline, while only 31 per cent of Americans agreed.

Respondents on both sides of the border -- 75 per cent in Canada and 68 per cent in the U.S. -- said oilsands development is a "good thing."

"We're seeing tonnes of coverage on oilsands, but we've never seen a comparison of Canadian and American attitudes," said Linda Smith, an executive vice-president with the polling firm.

Greg Stringham, the Canadian Association of Petroleum Producers' vice-president of markets and fiscal policy, said Bingaman's comments are a positive indicator. But he cautioned that the environment has become a bipartisan issue that will cross party lines in the upcoming presidential election.