Don’t Hate the Pipeline: Hate the Fuel—Or Better Yet, Tax It.

Alberta’s tar sands—or, as pitchmen prefer to call them, oil sands—are to transportation as cow dung is to cooking: a dirty way to reach a goal.  Cleaner alternatives, like LPG for cooking or even Saudi oil for cars, exist, but they often cost more.

Greenhouse-gas emissions associated with tar sands mining and processing have motivated protests against Keystone XL, a proposed pipeline that would carry large quantities of tar-sand derived fuel into the US. Influential American environmentalists, like NASA’s James Hansen and writer Bill McKibben, have editorialized against the pipeline. In January, the Obama administration rejected one proposed route, but Keystone’s developer, TransCanada, can offer another.

I fear that, no matter what happens with Keystone, Alberta’s sands will likely be mined and will add to global greenhouse-gas emissions. If we Americans don’t buy the fuel, someone else will. Countries such as China and India are not rich in oil and are seeing rapidly growing demand for transportation fuel. They’d welcome a relatively cheap and reliable source. Granted, some company would have to invest in massive shipping terminals to move the tar-sands fuel to Asia. But as long as crude prices stay above $80 a barrel—one estimated breakeven point for extracting oil from the sands—somebody will.

Don’t get me wrong. I’m no tar-sands fan. Pictures of the extraction are about as comely as those of a mountaintop coal mine. They make my Berkeley soul cringe.

So what might we do to discourage tar-sands mining? Protests in front of the White House get lots of news coverage, but I wish that the same energy had been lavished on lobbying for a carbon tax for the G20. I, and many others, have said before that taxing carbon would serve the interests of developed and developing countries alike. A carbon tax would make tar-sands oil more expensive and potentially uncompetitive with other carbon-based fuels. It would also boost carbon-free renewables such as solar thermal and wind.

We can continue to waste time trying to legislate our way out of the climate crisis via inefficient standards. We can protest and preach. Or, more sensibly, we can start taxing more bads, like carbon.

About Maximilian Auffhammer

Maximilian Auffhammer is the George Pardee Professor of International Sustainable Development at the University of California Berkeley. His fields of expertise are environmental and energy economics, with a specific focus on the impacts and regulation of climate change and air pollution.
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