Coal Costs the US $62 Billion in External Costs -NRC Report

by: phaedrus

Wed Oct 28, 2009 at 23:24:24 PM EST

The quick and dirty: Our energy production and use in 2005 cost us $120 billion in externalities, over half of which, $62 billion, come from coal.

Most interesting is the fact that many of the possible externalities that could have been attributed to coal were not considered for the sake of this report. As David Roberts from Grist puts it:

First, note that the report did not attempt to quantify the damage to  ecosystems and agriculture wrought by climate change. It did not attempt to  quantify the national security costs of securing energy supplies. It did not  attempt to quantify the land-use costs of biofuels. It didn't attempt to  quantify the costs of mercury pollution, which as Bill  Chameides documents, are substantial. It didn't attempt to quantify the  impact on taxpayers that subsidies  to the coal industry impose.

So a huge chunk of costs were written out, meaning the results are extremely  small-c conservative. Nonetheless, the NRC found that hidden costs amounted to  $120 billion in 2005.

A study by MACED was released earlier this year that outlined the cost of the coal industry to the Commonwealth of Kentucky that found:

Coal is responsible for an estimated $528 million in state revenues and $643 million in state expenditures. The $528 million in revenues includes $224 million from the coal severance tax and revenues from the corporate income, individual income, sales, property (including unmined minerals) and transportation taxes as well as permit fees. The $643 million in estimated expenditures includes $239 million to address the industry's impacts on the coal haul road system as well as expenditures to regulate the environmental and health and safety impacts of coal, support coal worker training, conduct research and development for the coal industry, promote education about coal in the public schools and support the residents directly and indirectly employed by coal. Total costs also include $85 million in tax expenditures designed to subsidize the mining and burning of coal.

"Coal generates inexpensive electricity, but not as inexpensive as the price signals indicate because those prices do not include the costs to human health and productivity, and the costs of natural resource destruction."

I'll be waiting to see the studies that counter these and will be very interested in the debate that ensues in academia and in the news. It seems to me that between the NRC, MACED, and WVU a pretty strong case is being made to support much of what is already known (see the map) and much of what has been suspected about how detrimental coal is to the US and Appalachia.  A just transition must be achieved, especially in Virginia where coal is running out fairly quickly as seen in this bar graph.

Though a grand plan on how this can be done might never be agreed upon due to the complexity of the problem and the political uncertainties that would evade such a plan, we can certainly start with ending the destruction of the economy through mountaintop removal.

Another great place to start that would provide jobs and electricity in the very near future would be to take advantage of the wind potential for many of the mountains in Appalachia like BP and Dominion are doing in Wise and Tazewell Counties in Virginia. Unfortunately even this obvious answer is being threatened by the coal industry in the case of Coal River Mountain, a West Virginia mountain with class six and seven wind potential, and some community support for the wind project.  Richmond based Massey Energy began blasting on Coal River Mountain this past Friday. The folks at Coal River Mountain Watch have shown that the wind potential for the mountain will be lost if blasting is allowed to take the planned 6,000 acres of mountaintop and push it into the valleys.

Pardon me, I digress. Sort of...

For more reading by people who have analyzed the NRC data a bit further I suggest David Roberts and Clark Williams-Derry's posts on the report, both from Grist, which you can read here and here.