Top EIA Energy Trends Watcher Agrees: We Do Not Count Damage to Public Property in Price of Fossil Fuels

Scaling Green recently wrote about the insights shared by energy trends analyst Chris Namovicz of the U.S. Energy Information Administration (EIA), who spoke at our “Communicating Energy” lecture series recently, and his comments regarding the lack of a definitive count on fossil fuel subsidies in this country. Today, we return to Namovicz’s lecture, this time to ask him about the economics of fossil fuel companies’ exploitation of resources on public property.

Here’s our question:

Their price drops in part because we’re not charging them to ruin public property. I mean, we basically are letting them contaminate water, we don’t charge them for that, and they don’t have to pay it. Your assumptions don’t include any price we would impose on them for hurting public waterways, is that accurate?

Now, here’s Namovicz’s response:

I think it’s easier to figure out the costs to mitigate the issue than it is to figure out the value of mitigation…[or of the loss of an asset], right.

This answer highlights a major problem with the way we account for the costs – or, more accurately, fail to do so - of fossil fuel production in this country. Attempts at accounting for these costs have been made, and have given us an idea of the scope of what we’re dealing with. For instance, a new study by Harvard researchers estimates the costs involved in the “life cycle coal production” in the United States. The answer is staggering: “between a third and over half a trillion dollars each year in health, economic, and environmental impacts.” That includes “damages from climate change (like weather events and rising seas, public health damages from toxins released during electricity generation, deaths from rail accidents during coal transport, public health problems in coal-mining regions (in Appalachia, mountaintop removal contaminates surface and groundwater with carcinogens and heavy metals), government subsidies, and lost value of abandoned mine areas.” And that’s just coal. The same type of analysis can and should be done for oil and natural gas, as well, with what you can expect to be similarly eye-popping results.

When the dirty energy lobby makes the Palin-esque claim that it’s not really subsidized, or hardly at all, it’s OK to laugh, or admire them for working so hard to believe their own nonsense. But it’s important to point out that it’s a lie, and a big one at that. The fact is, the direct and indirect underwriting to this industry - including an almost complete failure to account for damages to public land, water, and health – has been wildly underestimated, not overestimated.

In stark contrast, clean energy doesn’t engage in wholesale wreckage of public property. We keep reading about the devastation caused by oil spills, natural gas “fracking,” mountaintop removal coal mining, etc., because we are renting our property to bad renters – people who aren’t charged a market rate, don’t give a security deposit, and who can absolutely counted on to wreck the house. Maybe a deficit-conscious country could do better.


My thinking isn’t as organized as I’d like but I wanted to comment anyways. I’d appreciate any constructive comments or critiques on this issue, and I apologize in advance for digressing.

The rightwing frame of free markets (which is usually a laissez-faire model rather than an efficient market model) doesn’t seem to address negative externalities. I won’t pretend to having spent a large amount of time studying the various rightwing economic theories but I’ve become acquainted with them. Moreover, it’s not so much a question of what rightwing economic theory looks like in its most sophisticated form (such as in Milton Friedman’s writings & the Chicago school political-economic ideology, and Austrian school economics). The underlying frame is what motivates adherents and shapes their thinking, and this can apply to rightwing economists, too.

The laissez-faire economic model refuses to address the idea of negative externalities and axiomatically expresses maximal economic utility as – for instance – the sum of revenues of oil companies. A second aspect of this laissez-faire frame (LF) is that it specifically privileges the seller. The apparent reason that LF theory advantages sellers is not because of economic considerations, it’s because of the authoritarian roots of LF. Sellers are likened to society’s ‘betters,’ or productive members of society, to be distinguished from “freeloaders.” This is the Ayn Rand-ian belief, which categorizes taxes as an attempt by the ‘have-nots’ to redistribute wealth earned by the ‘haves.’ Taxation is therefore considered to be a form of economic dis-utility that – purportedly – decreases the nation’s wealth.

Buttressing the Rand-ian belief is the frame of Social Darwinism (SD). Wealth is considered proof in itself of economic superiority and attempts to regulate industry are considered harmful to the economy as well as punitive to society’s ‘betters.’

Another aspect of the rightwing frame is modern/symbolic racism, which appears on the surface as a belief in the work ethic but almost invariably focuses solely on people of color, who purportedly lack the requisite determination and willingness to succeed and thus seek to redistribute wealth from those who have those qualities.

A final element (for now) of the rightwing frame is the “strict father” (SF) frame (Lakoff, George). I won’t attempt to fully explain the SF frame here but what’s important is how it projects a psychology on others. In essence, those who advocate taxation are suffering from a deficient upbringing. Self-reliance is a value that’s taught (by strict fathers) and those who lack it are parasites on the system. Not only are they parasites who rely on the charity of others, their faulty development has shaped their thinking process and they can’t see the source of their problems, which is lack of self-discipline.

I realize I’ve gone far afield in attempting to explain how certain frames influence the rightwing cognitive process but it’s necessary to understand that cognitive process in order to understand why certain ideas – however rational and seemingly reasonable – are rejected out of hand by conservatives. Furthermore, much of the framing thought process is unconscious, so it’s not open to rational introspection. Moreover, many of the rightwing beliefs are emotional in nature and contradictory evidence is rejected. No amount of logical argument, no matter how persuasive, can convince them to give up their cherished beliefs.