Maybe all the fuss over the Keystone XL pipeline is already paying off -- just not in the way its opponents had hoped.
Those fighting the oil pipeline are upset over yesterday's ruling by the U.S. State Department's inspector general, which found that an earlier report supporting the project, and written by a contractor with ties to the company pushing it, didn't violate the department's conflict-of-interest rules. "This process has stunk, start to finish," said Bill McKibben, co-founder of 350.org, an environmental group trying to stop Keystone.
But the week's more important news came from Alberta, Canada, where a senior official suggested that the province will increase its carbon tax, set to expire in September. For people whose only goal is blocking the pipeline, that won't matter one bit. But if the goal is reducing the greenhouse-gas emissions from Canada's oil sands, Alberta's new rules could be just as important.
Two big caveats apply. First, it's too soon to say whether the province's new carbon rules will be tough enough to matter. The current tax of $15 a ton is too low to induce oil producers to switch to cleaner means of extraction; Alberta's government last year suggested increasing the carbon tax to $40 a ton, but backed off. The Pembina Institute, a Canadian environmental advocacy group, says the tax needs to be at least $100 a ton. Any new regulations will probably be far short of that.
Second, it would be unfair to credit U.S. activists alone for Alberta's considering tougher rules. Canadians' views on the oil sands are more complicated than Prime Minister Stephen Harper's chest-thumping suggests: Just 52 percent of Canadians surveyed in December said they support building the pipeline, down from 68 percent in April. Canadian unease over oil sand emissions predates the Keystone debate in the U.S., and will outlast it.
Still, the power of American consumers means American views matter. "We understand that it's about market access," Alberta Environment Minister Robin Campbell was quoted as saying by the Calgary Herald. "We have to get our products to market. If we're going to be able to do that, we have to do a good job of looking after the environment."
President Barack Obama said Monday that he'll make a decision on Keystone within a few months. The groups that have sprung up in opposition to the pipeline will then have to decide where next to direct their attention, their mailing lists, their fundraising efforts and their media savvy.
They could do a lot worse than to look for ways to make Alberta's next round of carbon regulations a lot tougher than they are today. That doesn't mean surrendering their opposition to the pipeline; it just means thinking beyond it, and accepting that losing this one campaign doesn't have to be "game over."
This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.
--Editors: Stacey Shick.
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