There has been some backroom back-slapping going on this week, at the intersection of US Resource Management Agencies and Canadian Oil Extraction Ministers; and at the heart of the wrangling is the "credibility" of what a former NASA Scientist has said about the Keystone Pipeline's potential to kick the world's Carbon level up into the stratosphere. Up by 150 points (ppm) when all is said and done, and seeing as how the world just broke the 400 ppm CO2 milestone -- that is decidedly NOT good news.
Yet we, as a society, continue to "support" the Ministers of Oil Extraction by giving their clients (like TransCanada) free use of our land, our water, and our air. We, as a society, fail to charge them for the "hidden costs" of what their very profitable product, will ultimately end up costing us.
You know, like we do with Alcohol and Tobacco Taxes. Those products ultimately "damage" society -- so we tax them to discourage their excessive use. We tax them to encourage those addicted to seek alternatives. We tax them so that as society, we re-coop some of revenue lost to debilitating emphysema, and horrific car crashes, and all those insidious cancers.
Yet we, as a society, have failed to make this same simple connection -- that hazardous, addictive products should NOT get a free ride with respect to the ultimate damage they cause us -- when it comes to the very addictive product of Oil.
This simple connection has not been lost on James Hansen however -- a guy who can crunch the numbers with the best of them. Hansen is flat out calling for a simple Carbon Tax, to make sure the true costs of Oil are plainly apparent to the market forces that be ...
by Joe Conason, truthdig.com -- Apr 26, 2013
Instead, Hansen favors a simple carbon tax or what he calls “fee and dividend,” with a rising surcharge on fossil fuels that is rebated in full to all taxpayers.
“The reason for the fee is simple -- it really needs to be collected at the domestic mine or port of entry so that it’s just across the board -- but unless you’re giving that money to the public, the public will never allow the fee to continue to rise because they will see the impact on the cost of gasoline at the pump and in their utility bills until there are some alternatives.”
He stands with the environmentalists in strong opposition to the Keystone XL project, however. “If you make that pipeline, that sort of guarantees that over time, you’re eventually going to exploit a lot of that (tar sands) resource. And it doesn’t make any sense economically if you look at it -- the only reason they go ahead with it is that it’s partly subsidized and it’s not made to pay for its cost to society. If we could stop it and get any sort of a price on carbon that even partially reflects the cost of CO2 to society, then tar sands would simply not be exploited.”
According to a paper he will soon release, “simple economic modeling shows that if you put a moderate rising price on carbon -- $10 a ton, going up $10 a ton for 10 years -- by the end of 10 years you would reduce United States emissions by 30 percent. And that’s 10 times or 11 times more than the volume of the Keystone pipeline. So there are much more effective ways of assuring our energy independence and contributing to stabilizing climate than trying to develop more fossil fuel sources.”
Do you know anyone who quit smoking -- because it cost too dang much?
Such long-run "price-incentives" actually DO work. The long-run costs to Society can actually be brought down, by focusing on true cost fees, instead of cluelessly allowing all those Big Oil free-ride subsidies.
And in tangentially related news, given the DC-Oil Drama that is still unfolding, as we speak:
TransCanada investors "punish" the Oil Corporation over the continuing delays on getting their profits into the pipeline -- the Keystone XL pipeline:
TransCanada shares drop after Keystone delays to cost; Q1 profit rises
by Deborah Bacal, proactiveinvestors.com -- Apr 26, 2013
TransCanada Corp (TSE:TRP) (NYSE:TRP) saw its shares fall on Friday after the company said it now expects its Keystone XL pipeline to be in service in the second half of 2015, with the delay likely to lead to an increase in costs.
As the company still awaits a U.S. presidential permit, the cost estimate of US$5.3 billion for the pipeline, which is designed to deliver mostly Canadian and some U.S. crude oil to refiners in Texas and Louisiana, will increase depending on the timing of the permit, TransCanada said, based on its pipeline construction experience. As at the end of the quarter, the company had invested $1.8 billion in the project.
Over the next three years, subject to required approvals, the company expects to complete $12 billion of projects that are currently in advanced stages of development, including the Gulf Coast project, Keystone XL, the Keystone Hardisty Terminal, and the initial phase of the Grand Rapids Pipeline, among others.
Shares of the company fell 1.7 per cent on Friday to trade at $48.92 as of late morning, from an open of $49.46, trimming year-to-date gains of almost 3.9 per cent.
Kind of makes you wonder how the Oil speculators would react, if their profits-pipeline were suddenly reduced by "$10 a ton" Carbon Tax that ratcheted up annually, doesn't it?
Well how did the Alcohol and Tobacco investors react when there were "consumption taxes" placed on their products, on an increasing basis?
I suspect a lot of them suddenly realized those were "dying profit centers" and so decided to put their dollars to work elsewhere -- in more "greener pastures."
A point source Carbon Tax could have the same effect -- it could cause the fair-weather investors to head for the renewable energy hills.
It couldn't hurt to find out, anyways. Afterall someone's going to bear the brunt of those Climate Changes costs, so shouldn't that include those who have excessively profited by them?
Former NASA Scientist James Hansen thinks so. Even if the Oil Investors who love to hate him, could have trouble dealing with the real costs that their product ultimately takes on society. There go their EZ profit-margins, don't you know?
Think Emphysema on a Planetary scale, and you just might realize that $10 a ton a fee, is probably NOT enough. The Barrons have crunched the numbers, and a serious Carbon Tax just might make them pack-it-in and invest their billions elsewhere.
Hmmm, I hear Windmill stocks are soaring ... and they don't have those stupid Carbon Fees either. Man, those fees are the kiss of death, corporately speaking, aren't they?