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Report Examines Hidden Costs of Energy

November 18, 2009 by · Leave a Comment 

The external damages from sulfur dioxide, nitrogen oxides and particulate matter created by burning coal at 406 coal-fired power plants, which produce 95 percent of the nation’s coal-generated electricity, were about $62 billion in 2005. These nonclimate damages average about 3.2 cents for every kilowatt-hour of energy produced. coal-power-plant-730306

Those are some of the findings of the National Academies’ congressionally mandated study called Hidden Costs of Energy: Unpriced Consequences of Energy Production and Use.

The report assesses what economists call external effects caused by various energy sources over their entire life cycle: not only the pollution generated when gasoline is used to run a car but the pollution created by extracting and refining oil and transporting fuel to gas stations. These effects are not reflected in energy prices, so consumers may not realize the full impact of their choices.

The study looked at, and gave a conservative estimates to key externalities from electricity and transportation: They estimated those came to $120 billion in the U.S. in 2005, a number that reflects primarily health damages from air pollution. The figure does not include damages from climate change, harm to ecosystems, effects of some air pollutants such as mercury and risks to national security (which the report considers but does not monetize).

Key findings include:

–       A few coal-fired plants — 10 percent of the total number — accounted for 43 percent of the damages.

–       Burning natural gas generated far less damage than coal, both overall and per kilowatt-hour of electricity generated.

–       A sample of 498 natural gas fueled plants, which accounted for 71 percent of gas-generated electricity, produced $740 million in total nonclimate damages in 2005, an average of 0.16 cents per kwh.

–       Life-cycle CO2 emissions from nuclear, wind, biomass and solar power appear to be negligible when compared with fossil fuels.

–       Transportation, which today relies almost exclusively on oil, accounts for nearly 30 percent of U.S. energy demand.

–       In 2005 motor vehicles produced $56 billion in health and other nonclimate-related damages.

–       Damages per vehicle mile traveled were remarkably similar among various combinations of fuels and technologies — the range was 1.2 cents to about 1.7 cents per mile traveled.

–       Nonclimate-related damages for corn grain ethanol were similar to or slightly worse than gasoline, because of the energy needed to produce the corn and convert it to fuel.

–        Ethanol made from herbaceous plants or corn stover (not yet commercially available) had lower damages than most other options.

– Suzanne Bopp


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