Thursday, February 13, 2014

The Toll of Coal

Coal is dirt cheap, or so we're told.  It sells for dirt cheap prices because it is so abundant, or so we're told.  Yet, like every other fossil fuel, the price of coal is rigged, literally floating on a cushion of subsidies, deferrals and grants and, above all, something known as "externalities" - very real impact costs that are never factored into the market price.  These are costs that are borne by the rest of us, freebies of death, dislocation and inevitable suffering that fossil fuelers are able to keep off their balance sheets.  And, with that sleight-of-hand they're quick to condemn clean, alternative energy as just too damned expensive to be worth it.

Paul Epstein, of the Center for Health and Global Environment of the Harvard Medical Center, led a team of researchers who measured the cost of externalities for Appalachian coal.  Their report was published in the Annals of the New York Academy of Sciences and is summed up in this graph:

The Epstein team said their findings were very conservative and didn't account for all externalities (such as overseas transportation) but still averaged out to 18-cents per kilowatt hour for coal.   When you add that to the market value of coal energy, it quickly becomes more costly than even solar or wind power.

We've got a very similar Ponzi scheme underway in Athabasca where the highest-cost, highest carbon synthetic petroleum is given the gloss of profitability by the enormity of the externalities that are swept under the carpet.  Something can be made to appear profitable today if you can defer those externalities for a Day of Reckoning twenty or thirty years down the road when it won't matter to the people who are calling the shots today.

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