Fukishima nuclear plant Japan. Credit: Moneyweek
In “The Real Price of Energy”, which appeared in Friday’s Los Angeles Times, and can be read here, Ronald Brownstein argues that the price of oil, and electricity from nuclear or coal, fails to reflect the cost of catastrophic disasters, or chronic environmental harm.
Federal oil drillers are liable “only for $75 million in damages after a spill.” And attempts to raise this to a more realistic level have been blocked by politicians. In the case of a nuclear accident, the plant operator is liable for $375 million, and the industry picks up the next $12.6 billion.
In both cases, taxpayers pick up the remainder of the tab, which as we’ve seen with the Gulf oil spill, and the Fukushima partial meltdown, may be much higher than ever anticipated. So this cost is external to the price we pay at the pump or in our electric bill. But we do pay for it in our taxes and/or national debt.
We at Plug In America have long argued that plug-in cars are already more efficient than convential vehicles even using today’s grid. But they really shine when paired with renewable energy like wind or solar. (see our energy policy)
In light of Japan’s continuing unfolding nuclear catastrophe, and new reports that oil is still spilling in the Gulf, it’s worth considering what might change if realistic energy pricing was in effect.
- All energy plant operators would have to run safer operations, because there would be no artificial limit to their liability in case of an accident.
- Consumers would have the incentive to switch to cleaner energy, and to tackle those energy-efficiency projects that previously may not have “penciled out”.
- Government subsidies, which are pretty unpopular in the current economic climate, could be ended. No need to subsidize wind and solar if you’ve leveled the playing field by pricing nuclear, coal, and oil-based energy properly.
Sounds like a win-win. Joseph Aldy, until recently the chief environmental economist for President Obama recently said of energy, “doing things that get the price right is a really important next step in our energy policy.” I too would like to see this happen.
