We’re Doing Our Energy Accounting Wrong

Does energy from fossil fuels really cost less than renewable energy? It’s an important question, as it should be shaping our lives. But given the way we do our accounting we will never know, and won’t be able to make rational policy decisions.

The renewable energy industry is forever trying to reduce its cost of equipment, capital, and operations in order to compete with electricity costs form other sources, such as fossil fuels. It is often thought of as the ‘alternative energy’, which always seems to need tax incentives or other subsidies in order to be cost effective (even though research shows that the oil and gas companies get more than 10 times the subsidies than renewables do).
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Under All is the Energy

The National Association of Realtors has a tag line which reads “Under All is the Land”, which they use to exemplify how real estate is fundamental to society. As a former Realtor who is also passionate about energy, I’ve always wanted to correct them. Their phrase is catchy, but it’s wrong.

The growth of society – of humanity in fact – is one of thermodynamics, not land. Matter itself condenses out of pure energy to form quarks, and then atoms, which use atomic energies to go on to form molecules, which then form dirt, cells, stardust, and you and I. We are made of energy.
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Why Electricity Costs Will Soon Level Off

Or, ‘Why we do not have to fear high energy prices in the future.’

Many people, including policy makers, worry about the cost of electricity rising so high in the future that it causes a have/have not society, economic Armageddon, or at least, place a drag on economic production. This is especially true in the USA, where energy costs are still among the lowest in the world, and even a doubling of electrical prices is seen as a catastrophe. But that is not what is going to happen.

As a technical business person who has been involved in the energy fields for nearly 40 years I have seen a glimpse of the future of electricity pricing in the form of island nations and remote villages. I have come to understand and experience why electricity prices will stabilize, after rising somewhat more, and why we don’t have to fear the worst. The sooner our policy makers also see this, the sooner we will be willing to accept a short term rise in electrical prices in exchange for the longer term benefits of environmental health and climate stability. At the moment we tend to view these paths as mutually exclusive: an expensive ‘choice’ we need to make where we can either have affordable energy, or we can have a a clean, sustainable future. In reality we will have both. Here’s why:
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