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Report tallies hidden energy costs
Web edition : Monday, October 19th, 2009
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The average retail cost of U.S. coal-fired electricity was 9 cents per kilowatt-hour in 2007 (the most recent year for which data are available). But there are health and environmental costs of that power that consumers don't pay, at least as part of their electric bill. According to a new report, accounting for those costs would double the true cost of shooting some electrons through the nation's power grid.

As long as such costs remain hidden, they risk skewing policy and purchasing decisions. A new report released today by the National Research Council now attempts to compute and tally those hidden health and environmental costs associated with energy. And although the sums it offers up are huge, the report acknowledges that society may decide they’re well worth accepting in light of the benefits provided by that energy.

At least as long as those costs are recognized.

For instance, siting a coal plant in a region that exaggerates the environmental impact of that fuel might be avoided if the costs associated with particular siting options were identified. Similarly, motorists may lose part of any incentive to conserve when the true costs of gasoline are not reflected in prices paid at the pump.

Now about that coal, which supplies nearly half of U.S. electricity: The NRC report finds that the hidden per-kWh health and environmental costs average a little more than 3 cents, but can be as high as 12 cents. The big differential largely reflects the age of plants — newer ones must employ better stack-gas cleaning technologies — and how much sulfur the coal contains.

These extras also don’t account for any pricey environmental havoc associated with global change wrought by coal’s emissions of greenhouse gases, principally carbon dioxide. NRC’s rough gauge of such costs, based on reviewing analyses by others, suggests that these might amount to another 3 cents/kWh.

The report also tackles natural gas use, transportation fuels, nuclear power and renewable energy sources. Together, it computes their fairly easy-to-identify hidden health and environmental costs as at least $120 billion per year. However, NRC’s new analysis adds, because “large uncertainties are associated with the [report’s] estimates, there is little doubt that this aggregate total substantially underestimates the damages.” And that’s because this aggregate total doesn’t account for climate impacts, many ecosystem impacts, damage to infrastructure and potential national-security and environmental risks that could be associated with the cradle-to-grave nuclear-fuel cycle.

When energy decision makers and consumers lack access to such “external” costs of power production, the NRC report says, “there is a case for government intervention in the form of regulation, taxes, fees, tradable permits or other instruments” — things that effectively serve to unveil those formerly hidden costs. And it was to gauge the magnitude of these — and, therefore, the potential need for new regs or taxes — that Congress commissioned this new analysis.

There is another source of hidden costs that this report doesn't seem to have addressed: subsidies. They also distort the apparent price of a fuel. I'm not arguing that subsidies aren't often useful, for instance in getting new technologies into the marketplace. They just shouldn't be hidden — at least not on timescales of years. 


Found in: Agriculture, Biomedicine and Science & Society

Comments 3

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  • Nuclear, looking greener all the time. Recycling is the green choice for spent fuel as well. And what a shocker, a report commissioned by Congress finds the need for government intervention. And of course, taxes and fees on electricity are the weapon of choice for the war on the poor. And getting rid of all those poor people can't help but lighten the load on poor Gaia. Besides, they are so uncool.
    ART DAY ART DAY
    Oct. 25, 2009 at 12:49am
  • Hidden Costs, Fatal Flaws

    There is a huge and, I believe fatal flaw, in the report. Although the
    report does evaluate ("monetize") all costs (cradle to grave) for
    transportation, it does not do so for electric generation.

    The title, the press release, and the tone of the introductory parts
    promise a complete look, but it never happens. There is some language
    that sort of acknowledges this failing but no rationale for leaving out
    the "feedstock", transportation, and disposal costs for coal v nat gas
    for electricity.

    The data is sort of there in the section on transportation, and one can
    "data mine" that section and roughly determine the total cost for nat
    gas. So, they had the data and didn't report it. They choose to just
    make the point that coal burns dirtier than natural gas.

    As you know there are large concerns with the hidden costs of producing
    and transporting natural gas. The effects on water (cf the huge issues
    being raised in NYS/NYC about drilling in the NYC watershed and in other
    parts of the state) are large. Also, one look at the air quality issues
    coming from DISH TX makes the point about GHG and human health hazards
    and costs.

    It would be wonderful if you could revisit your review and address the
    huge failing of not making the critical and promised comparison. The
    issue goes directly to the national concern and debate about "clean"
    energy. Also, the Sierra Club is, I am told, now having a vigorous
    internal discussion about the appropriateness of supporting natural gas
    as a bridge fuel. "Hidden Costs" would go a very long way toward
    grounding the debate, and clarifying things for policy makers - if it
    was complete.

    As a scientist, I know that the report, coming from the very prestigeous
    National Academy/National Research Council on the request of Congress,
    will be taken very seriously at the highest policy levels. I fear that
    our leaders will reach a incomplete decision if they believe that
    "Hidden" is the final answer to the "bridge and GHG/global warming work
    that they are so deeply and importantly engaged in.

    We have had 8 years of junk science informing policy. I hope that this
    report does not represent more of the same - possibly in a good cause,
    but bad science nevertheless.

    Stanley R Scobie, Binghamton, NY
    Stan Scobie Stan Scobie
    Nov. 3, 2009 at 12:29am

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    m9bnat m9bnat2 m9bnat m9bnat2
    Jan. 14, 2010 at 10:54am
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Citations & References :
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  • Committee on Health, Environmental, and Other External Costs and Benefits of Energy Production and Consumption; National Research Council. 2009. Hidden Cost of Energy: Unpriced Consequences of Energy Production and Use. National Academies Press: Washington, D.C.: 466 pp. [Go to]
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