I believe in free markets, at least for most commerce. As do most Albertans. Partly because they believe a free market in oil made them rich. In fact, it didn’t. It couldn’t have because we’ve never had a free market in oil. Not even close.

Consider the price of oil. The price of a product in a free market approaches what the most efficient producer can make it for plus a reasonable profit. Saudi Arabia’s production costs for a barrel of oil are under $10 per barrel (including capital. production, administration and transportation). Add a reasonable profit and you have a free market price approaching $15 a barrel.

But the world price of oil today is about $75 a barrel. That extra 60 dollars that you pay for at the pump is what may be called the monopoly markup or the cartel premium. You pay it because the price of oil is determined less by the free market and rather more by Saudi Arabia and its friends in the organization called OPEC+ (The Organization of Petroleum Exporting Countries and its allies).

OPEC+ is a cartel that collectively has enough ownership of the product to exercise monopoly control. By turning the taps on and off they can control the supply and thus the price. Not only does OPEC+ exercise a monopoly, it’s a monopoly of governments. Government interference in the marketplace is yet another great sin in the minds of free market fundamentalists.

Nor was there a free market before OPEC began to flex its muscles in the 1970s. Prior to OPEC, the global oil industry was largely controlled by a cartel of American and British companies—the infamous Seven Sisters.

To make a profit from Alberta oil requires upwards of $30 a barrel, well above a free market price. If we had always had a free market in oil, there would have never been an oil sands industry or, if you prefer, a tar sands industry. Indeed, there wouldn’t have been much of a conventional oil industry in Alberta. There would at least have still been natural gas, no small consolation.

OPEC has made Alberta very rich, but at the cost of making us one of the world’s top polluters. The three major greenhouse gas emitting countries among the advanced nations, on a per capita basis, are the U.S., Australia and Canada, and Alberta is the pollution province. This I am not grateful for, so thanks OPEC but no thanks.

Indeed, development of the tar sands struck me as insane from the beginning. Producing bitumen requires piping large amounts of natural gas north to provide energy to get the stuff out of the sand, and then it has to be diluted with lighter hydrocarbons so you can move the stuff through a pipeline. In other words, other useful hydrocarbons are wasted to produce one of the world’s dirtiest oils when vast amounts of cleaner, cheaper oils are available. And all while turning large areas of boreal forest into a hellscape. This is not an activity a sane species would engage in.

Where we would be if oil had always been subject to a free market is impossible to say (although interesting to speculate about). But at least there would be no tar sands nonsense, and that at least puts in a good word for free markets.