177
that fossil fuel is literally cheaper than dirt. And the least expensive way to utilize
the already cheap fossil fuel is to simply burn it in air and allow the combustion
products to waft away into the atmosphere up a smokestack or out an exhaust pipe.
These low-cost economics undercut all of the other, cleaner energy alternatives that
are out there.
Fossil fuel would be far more expensive if the true cost of environmental damage
and the risks to climate, air, water, landscapes, and public health were included in
the price. They are not of course, and these are known as “externalized costs.” Many
industries employ this tactic of cost-shifting; for example, big tobacco transfers the
cost of medical conditions that result from the use of their products to society; the
burden in particular falls on the premiums paid by the non-smoking participants of
group medical insurance plans to cover the cost of treatment for members with
smoking-related illnesses. However, the energy industry and especially big coal are
the undisputed champions of externalized costs. Society and taxpayers cover
expenses for stream restoration, landscape reclamation, spill and environmental
cleanup programs, and now climate disruptions and resilience. Placing the burden
for these costs back onto the price of fossil fuel would help other, non-GHG emitting forms of energy become more economically competitive. Externalized costs
are discussed in more detail in Chap. 11.
Several types of sustainable clean energy technology exist, but they are all more
expensive than the equivalent energy from fossil fuel. Although many people claim
to support a cleaner environment and profess concern about climate change, the
bottom line is that if electricity from a clean, sustainable source costs them more
money, most utility customers would rather pay a cheaper electric bill from a coalfired generator. This is the carbon conundrum.
Competition from low-priced fossil fuel has forced renewable energy sources
like wind turbines and solar installations to require tax incentives (another externalized cost) to survive as an alternative. If the United States ever hopes to transition
away from fossil fuel to sustainable, clean energy through the “Green New Deal” or
any similar policy, the economic playing field must be leveled and these cost differences addressed. Under the current rules of the game, fossil fuel prices undercut
every available alternative, and our dependence on these fuels will likely continue
for a long time to come if nothing changes.
A good way to compare the economics of different energy sources is through the
cost of electricity. Electricity cannot make new power, but only transform a “primary” power source into another that is more easily transmitted and used. The
amount of power generated in the U.S. varies, but to pick a number for an example,
total U.S. electrical generating capacity in August 2019 was approximately 400
gigawatts (Gw). Fossil fuel generated 273 Gw or 68% of this total. The fossil fuels
used for making electricity are primarily coal and natural gas. Abundant gas from
fracking and the development of shales has in fact displaced coal over the past
decade as the leading fossil fuel for electrical generation. Oil-fired electricity was
more common in the U.S. before the 1973–74 energy crisis, but this was sharply
curtailed after the crisis to keep liquid petroleum stocks available for transportation
9.3 The Future of Fossil Fuel
that fossil fuel is literally cheaper than dirt. And the least expensive way to utilize
the already cheap fossil fuel is to simply burn it in air and allow the combustion
products to waft away into the atmosphere up a smokestack or out an exhaust pipe.
These low-cost economics undercut all of the other, cleaner energy alternatives that
are out there.
Fossil fuel would be far more expensive if the true cost of environmental damage
and the risks to climate, air, water, landscapes, and public health were included in
the price. They are not of course, and these are known as “externalized costs.” Many
industries employ this tactic of cost-shifting; for example, big tobacco transfers the
cost of medical conditions that result from the use of their products to society; the
burden in particular falls on the premiums paid by the non-smoking participants of
group medical insurance plans to cover the cost of treatment for members with
smoking-related illnesses. However, the energy industry and especially big coal are
the undisputed champions of externalized costs. Society and taxpayers cover
expenses for stream restoration, landscape reclamation, spill and environmental
cleanup programs, and now climate disruptions and resilience. Placing the burden
for these costs back onto the price of fossil fuel would help other, non-GHG emitting forms of energy become more economically competitive. Externalized costs
are discussed in more detail in Chap. 11.
Several types of sustainable clean energy technology exist, but they are all more
expensive than the equivalent energy from fossil fuel. Although many people claim
to support a cleaner environment and profess concern about climate change, the
bottom line is that if electricity from a clean, sustainable source costs them more
money, most utility customers would rather pay a cheaper electric bill from a coalfired generator. This is the carbon conundrum.
Competition from low-priced fossil fuel has forced renewable energy sources
like wind turbines and solar installations to require tax incentives (another externalized cost) to survive as an alternative. If the United States ever hopes to transition
away from fossil fuel to sustainable, clean energy through the “Green New Deal” or
any similar policy, the economic playing field must be leveled and these cost differences addressed. Under the current rules of the game, fossil fuel prices undercut
every available alternative, and our dependence on these fuels will likely continue
for a long time to come if nothing changes.
A good way to compare the economics of different energy sources is through the
cost of electricity. Electricity cannot make new power, but only transform a “primary” power source into another that is more easily transmitted and used. The
amount of power generated in the U.S. varies, but to pick a number for an example,
total U.S. electrical generating capacity in August 2019 was approximately 400
gigawatts (Gw). Fossil fuel generated 273 Gw or 68% of this total. The fossil fuels
used for making electricity are primarily coal and natural gas. Abundant gas from
fracking and the development of shales has in fact displaced coal over the past
decade as the leading fossil fuel for electrical generation. Oil-fired electricity was
more common in the U.S. before the 1973–74 energy crisis, but this was sharply
curtailed after the crisis to keep liquid petroleum stocks available for transportation
9.3 The Future of Fossil Fuel