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Hidden Energy Costs Richard Perez

ommercial electric power costs about 7.75¢ per kiloWatt-hour, and gasoline costs around $1.10 per Cgallon at the pump. These are the prices we pay for energy, or are they? I always figured that the true cost of energy was higher than this because the societal and environmental consequences of energy use are not included in these costs. The American Solar Energy Society (ASES), in its publication "1989 ASES Roundtable: Societal Costs of Energy", has quantified many of the hidden costs in our

energy bill. This information is very revealing- it shows we are paying far more than we might think.

Hidden Energy Costs


Cost Classification

Subsidies Health Impact Military Employment Radioactive Waste Crop Loss Corrosion


Subsidies Health Impact Military Employment Radioactive Waste Crop Loss Corrosion

This table shows each hidden cost

classification, its estimated minimum cost,

its estimated maximum cost, its estimated

average cost (the average of the preceding

two categories), and the estimated average

cost per person living in America. This last

amount is figured by dividing the average

folks living in the US. The estimated average hidden cost per classification is presented graphically in the chart to the right.

What is really shocking is that we are actually paying between 109 billion and 260 billion dollars yearly in hidden energy costs. In terms of an individual, each of us is paying over $740 yearly in hidden energy costs. Let's look at each hidden cost classification, starting with the potentially most expensive- our health.

Health Impact

The major health impacts are caused by our combustion of fossil

What is a "Hidden Cost"

When we pay the power company's electric bill or fill up our car's tank, we pay a specific price for the energy we directly consume. What we also pay, sooner or later, are many hidden costs associated with our energy usage. For example, I quote Michael Nicklas in the ASES report.

"Our free market economy operates best when both the buyer and the seller have complete knowledge of which choice will benefit them the most. With energy , this is obviously not the case. How many people know that sulfur dioxide from just our coal burning plants is costing Americans $82 billion per year in additional health costs? How many farmers are aware that they are annually losing $7.5 billion per year due to reduced crop yields caused by air pollution? And, how many people are really aware that nuclear waste and decommissioning costs (which, for the most part, we have not seen yet) are the equivalent of $31 billion per year?"

Quantifying Hidden Costs

Michael Nicklas and the ASES has done a well documented study of the hidden costs of energy. This table was compiled from their data.

Minimum Hidden Cost in $ per Year

Maximum Hidden Cost in $ per Year

Average Hidden Cost in $ per Year

Hidden Cost per US resident in $ per Year

$43.3 Billion

$55.2 Billion

$49.3 Billion


$11.8 Billion

$82.0 Billion

$46.9 Billion


$14.6 Billion

$54.0 Billion

$34.3 Billion


$30.6 Billion

$30.6 Billion

$30.6 Billion


$4.3 Billion

$31.2 Billion

$17.8 Billion


$2.5 Billion

$7.5 Billion

$5.0 Billion


$2.0 Billion

$2.0 Billion

$2.0 Billion


$109.1 Billion

$262.5 Billion

$185.8 Billion


Hidden Cost of US Energy

cost by the 250 million



$20 $30

$40 $50 $60

$70 $80 $90

Cost in Billions of Dollars per Year

Minimum Maximum Average

fuels. Here the information is far from complete and the maximum estimate is, in my opinion, most certainly low. This estimate is based on the combustion of low sulfur coal and the resultant sulfur dioxide pollution (which eventually winds up as acid rain). Ron White of the American Lung Association estimates that if the new Environmental Protection Agency (EPA) standards regarding sulfur dioxide emissions are adopted, Americans would save 82 billion dollars in health cost yearly. And this is just from cleaning up coal burning plants. The health costs of automobile emissions and nuclear waste/accidents are not included in this total. The problem is really much greater. Who can really put a price on disease and

Home Power #16 • April/May 1990


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