Looser collusion laws for oil sands producers

2009-06-29

in Canada, Economics, Law, Politics, The environment

Apparently, Canada’s Competition Bureau is considering loosening rules on collusion to benefit oil sands producers. Specifically, the proposed rule would permit firms to coordinate on megaprojects, without risking criminal charges for anti-competitive behaviour. Firms could do things like plan staggered construction schedules, to try to avoid the large increases in costs that accompanied the run up to $150 a barrel oil last year.

While the chaotic booms and busts of Alberta’s oil patch probably aren’t economically efficient or environmentally benign, it’s not clear that giving firms more scope to coordinate their behaviour is a good solution. Already, the government of Alberta is far too lax in the regulation of oil sands projects. Given how the interests of oil sands producers can conflict fundamentally with those of the population as a whole (especially when long-term environmental damage and cleanup costs are considered) it seems a lot more sensible to improve coordination through government policies intended to enforce the public interests, rather than giving oil giants more leverage through which to seek their own.

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