Tuesday, July 11, 2006

What Industry Does Best


Fort McMurray, Alberta faces problems from the exponential growth of the Athabasca oil sands project:

"Fort Mac" already has a shortfall of nearly 3,000 homes, 17 police officers and two public schools. Its assault rate is nearly twice the provincial average; its drug offences are triple.

Population continues to grow at about 10 per cent a year....The city needs a new water treatment plant, police station, recreation centre and fire hall. One report estimates the area will need $1.2 billion in infrastructure to accommodate growth - costs that continually inflate because of the overheated economy that makes them necessary in the first place.
There's talk of having the oil sand extraction industry chip in towards these costs; after all, they benefit directly from the local labor boom, and the infrastructure that supports it. Needless to say, though, they see matters somewhat differently:
[Suncor spokeswoman Darcie] Park said Suncor is cautious about demands that it directly fund municipal infrastructure, even if it's partly their employees causing the increased demand.

"Industry should do what industry does best, which is to work to responsibly develop the resource," she said. "Governments should do what they do best, which is to identify needs for public funding and provide the funding."
Or to put it another way, "the social responsibility of business is to increase its profits, and feeding parasitically off municipal taxes is as good a way as any."

Meanwhile, at the Alang shipbreaking yards in India, workers earn $2.40 per day to take oil tankers apart by hand:
Cheap labor is crucial to sustaining an 8 percent economic growth rate, the fastest behind China among Asia's major economies....
The work is extremely dangerous, and almost totally unregulated. On the other hand, it's work:
"I've got no other choice but to suffer through this,'' says Kumar, wearing a thin cotton shirt and pants perforated with tiny holes from sparks that fly off the metal he cuts.


Nothing good lasts forever, though:
Shipbreaking is in decline worldwide as surging freight rates prompt shipping companies to delay replacing vessels. About 70 oil tankers totaling 3.5 million deadweight tons are scheduled to be scrapped this year, down 52 percent from 2004, according to London-based Drewry Shipping Consultants Ltd.
Delaying the replacement of aging oil tankers is more than a little risky, of course. But what are you gonna do?

Personally, I'm hoping that Alberta will raise enough public funding for infrastructure improvements that Suncor will be able to produce enough shale oil to lower fuel prices enough to make it cost-effective to send aging oil tankers to Indian shipbreakers, thereby reducing the likelihood of catastrophic oil spills.

It seems as reasonable as anything else.

(Photo by Edward Burtynsky.)

2 comments:

roger said...

it seems that one of the things industry does best is avoid taxes. i'd guess that the spokesperson doesn't live there.

roger

Phila said...

IIRC, the firms developing oil sands received huge, HUGE tax breaks. As in billions.

I'd have to doublecheck to be sure.