David Weinberger writes:
There is no doubt that the oil sands extraction, delivery, and processing mechanisms are extraordinarily injurious to the environment and to public health. High-profile protests have sprung up across the U.S. and Canada to fight the project’s execution, which environmentalists like Bill McKibben claim would pose a threat to potable water supply, Canadian boreal forests, and global climate.
TransCanada, which has recorded liabilities of approximately $84 million for remediation obligations and compliance costs associated with environmental regulations, estimates that its pipeline could reasonably leak 11 times within its first 50 years in existence. Others argue that this number is very conservative, especially given the existing infrastructure’s track record, and that a more honest estimate would be to say that the new stretch could leak more than 50 barrels close to 91 times within 50 years. But as TransCanada rightly admits on its website, “it is not possible for the Company to estimate the amount and timing of all future expenditures related to environmental matters.” With such immeasurable environmental and economic externalities to consider, risk assessment is more of a defensive posture than a display of corporate ethics.
Risk to an ecosystem is not a factor for which advance remedial funds are sufficient. Instead, given that the economy of a locality is so deeply rooted in its ecology, environmental risk should be integrated with economic risk in upfront cost-benefit analysis. A program’s potential effect on ecosystem services, such as potable water supply, waste detoxification, crop pollination, disease control, game and seafood supply, and carbon sequestration and climate regulation should be internalized in calculating its lifetime cost.
After the oil spill in the Yellowstone, ranchers in the region reported a loss in biodiversity, a decrease in productivity, significant damage to their land, and contamination of their water supplies that will no doubt affect output. These long-term effects on land, a crucial factor of production for local farmers, must be considered when planning for risk.
Indeed, the EPA expects that several hundreds of acres of wetlands will be affected by the new stretch of pipeline, which will carry 830,000 barrels of oil from tar sands each day. A leak would also threaten water quality in the Missouri River, which provides for more than half of all Missourians’ drinking water, as well as services related to “recreation, power generation, water supply, river commerce, and fish and wildlife.”