[evgen]

The demand for shipping the oil via train or truck will also diminish over time as these horrible and expensive oil reserves are eventually made too expensive to extract. If you build a pipeline and put in the investment then you have standing infrastructure and sunk cost that will compel people to keep pulling out the tar sands oil, even at a loss. If they are forced to use tankers then the (higher) cost per barrel for transport is paid immediately and by the supplier instead of foisted off on some bond holders somewhere.

Pushing the transportation demand to trains/tankers is a GOOD thing, it makes everything visible and obvious and it prevents the oil company from hiding the factors that make this reserve the pile of flaming dogshit we all know it to be.

[shawnz]

Perhaps the government should actually subsidize the pipeline to eliminate those extra sunk costs compared to tankers/trains. It would basically be like paying for carbon capture (except you're actually paying for it to just be transported more safely in the first place).

[evgen]

Why subsidize? Let the producer pay the freight. We want to eliminate this oil source anyway, so if there is anything we should be doing right now it is to more heavily tax oil sources like these which have such significant negative externalities.