Wednesday, March 29, 2017

Externalizing Cost and the keystone pipeline

Keystone is in architecture the piece that hold a structure together. Metaphorically speaking is used to talk about the most important element of a system that maintains it working and holds it together, it could be a person in an organization or a species in an ecological system.
 It is in this way the the Keystone pipeline project between the USA and Canada becomes very important, not only economically, but most important politically.

So the question is why are so many people opposed to this project? And why it is so important for those involved in favor of the project?

Economically it makes sense to move resources to where they can exploited more efficiently. That means that if the raw oil extracted in Canada can be refined more efficiently in the Gulf Coast refineries then transporting it there is the thing to do. From the Gulf refineries these refined and processed petrochemicals can be exported to the rest of the world. They can also be transported to the rest of the USA if necessary.

So what is wrong with this picture? Why are so many people opposed? Aren't already lots of pipelines underground in the USA as we can see in this Wikipedia figure?

For one there is this thing about how are we using fossil fuels, and how are we adding green house gases into the atmosphere. Another is how are we supporting or not alternative technologies that are friendlier to the environment and accelerate economic growth?

It is sad that yesterday March 28, 2017 the US administration through executive orders rolled back provisions that regulated emissions from coal power plants and other environmental regulations. Now China is becoming a leader in power generation and transportation technologies such as electric cars that will conform the structure of future society. This structure is multinational, international, and global in character and there is nothing we can do to stop this trend. China on one hand and Russia in the other will tend to dominate markets based on their technological (China) and energy (Russia) resources. The pacific region dominated until now by the USA will shift its fulcrum to China and the Atlantic to Europe.

In the mean time who will pay for this? One thing is to allow free investment in energy like the Keystone pipeline, and another thing is who is going to pay for all the damage to the environment. It is ironic that the same day that the rollback of the environmental protection regulations was signed an oil spill in North Dakota near the Standing Rock indian reservation was detected. For more read here. This spill gives even more support to the demonstrators at the Standing Rock indian reservation that are afraid of the danger and damage their livelihood is facing.

Who will pay for these devastating incidents? We, of course, pay for them. This is how it has been, when ever there is a cost associated with pollution we tax payers foot the bill. The industries causing the damage get aways, sneaking out through the back door, with all the profits and gains.

This is what externalizing costs means. Internalizing gains and profits for the shareholders but making society (us) pay for all costs associated with the damaged environment. Is there anything we can do as a democratic society to change this?    

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