The Athabasca oil sands (in Alberta, Canada) are not pretty. But they are vast, constituting one of the largest deposits of oil in the world — something in the range of 150 billion barrels, enough to help make Canada a net exporter of oil.
The oil sands (also known, colloquially and sometimes pejoratively, as the “tar sands”) are also environmentally controversial. The process of extracting oil from oil sands is not a clean one; it has a significant impact on land, air, and water. In fact, the process is so messy that it is only worth doing when the price of oil is relatively high, as it is right now. For environmental groups and other critics, the oil sands are just not worth it.
It’s worth noting that the oil sands do have their defenders. Matt Ridley, for example, in his recent book, The Rational Optimist, argues that the oil sands are a much more sane solution to current energy needs than things like wind (too unreliable and too little output) and biofuels (wasteful use of land).
Back in July, two US-based groups (Forest Ethics and Corporate Ethics International) called for a boycott of Alberta as a tourism destination. (See the Financial Post story, here.) More recently, though, the boycott has expanded to include a number of American retailers who have promised to refuse to use any petroleum products from the oil sands. See the Scientific American story, by Tina Casey, Boycott of Petroleum Products from Alberta Tar Sands Gathers Steam:
In a sign of things to come for corporate activism, The Gap, Timberland, Levi Strauss and Walgreens have just joined Whole Foods and Bed, Bath and Beyond in a boycott of petroleum products sourced from the notorious Alberta Tar Sands. As reported by Bob Weber of The Canadian Press, Federal Express has also adopted a policy that appears to lead toward joining the boycott….
(A more recent story suggests that Levi Strauss is not, in fact, participating in the boycott.)
A few points:
First, I’m generally skeptical about boycotting an entire jurisdiction (as the original boycott of Alberta tourism seemed to intend) on the grounds that you don’t like one particular business there. It’s entirely unclear how boycotting Alberta tourism was supposed to convince the government of the province to shut down the oil sands. (Note that while tourism is not exactly trivial in the Albertan economy, neither is it crucial. And besides, international visitors to Alberta account for just 7% of the province’s tourism.) Note also that the principle supposedly at play here doesn’t generalize very well. If you don’t like Walmart, do you boycott Arkansas, where Walmart is headquartered? Is anyone calling for a boycott of the U.K.? After all that’s where BP is based.
But I’m even more interested in the corporate boycott by Whole Foods etc.
As this opinion piece points out, anyone thinking of boycotting oil from the oil sands needs to think about what they’re choosing instead:
Where are they going to buy their gas from, if not Canada?
Saudi Arabia? Could there be a more unethical barrel of oil than one from that racist, misogynistic, terror-sponsoring dictatorship? Venezuela, to enrich strongman Hugo Chavez? Iran, with its nuclear plans?
In other words, if you’re really going to get picky about where your oil comes from, you’d better just stop using it at all.
The same opinion piece (by Ezra Levant) pointed out that many of the companies participating in the boycott are not exactly angels themselves. Walgreens (a pharmacy chain) was fined $35 million for defrauding Medicaid. And pretty much everyone knows that The Gap has been the target of its fair share of criticism over the labour practices at the third-world factories that produce the clothes it sells. Now, being hypocritical doesn’t mean being wrong, but it might well lessen these companies’ moral authority somewhat. (And notice that Levant suggests a tit-for-tat boycott of The Gap, etc., by Albertans.)
Next, an economic point. I’m no economist, but my guess is that if the corporate boycott has any impact at all, it will be roughly as follows. The reduction in demand for oil-sands oil will reduce the price it can command. And when you lower the price of something? Yup, you make it easier for other people to buy it. So, more — not less — will end up being used.
Finally, the points above leave us with the conclusion that the corporate boycott of oil from the oil sands is largely symbolic. Well, that’s not necessarily a bad thing, is it? I guess that depends on who is sending, and who is receiving, that symbolic message. And in this case, the message certainly isn’t going to have — indeed, can’t possibly be intended to have — any effect on decision-makers in Alberta. So the only real possibility is that Whole Foods, The Gap, etc., are sending a message to consumers. What message? “We’re green,” I guess, or “We care.” But the message being heard by anyone looking at this carefully is, “We haven’t thought this through.”[Thanks to MW for suggesting I blog on this.]